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Conventional wisdom has it that the average worker is being woefully exploited by her capitalist employers. Labor economic analysis aside here, is it in the interest of typical workers to have government mandate higher wages and benefits to be paid by employers and to secure all manner of regulations which on their face works in their favor (unintended consequences loom)? Or should they be pursuing alternative measures to improve their well being. With an average tax burden in the US of around 33% (number of days a typical worker must work in order to pay all direct taxes), you might think that free-market advocates and organized labor would be natural allies in the fight to eliminate income and other taxes.


But you would be wrong. Several points are worth considering when crafting reasons why.


  1. The lowest income Americans simply do not pay much in income tax. As this report indicates, the bottom 50% (yes, that is half of all taxpayers) pay only 4% of the total income taxes in the US. And nearly half of all Americans pay no income taxes at all. If constituents are not paying taxes, it is hard to lobby to reduce them! Hence, increasing wages is a natural approach.
  2. But these people do pay lots of other taxes – property taxes, sales taxes, excise taxes, etc. which all fall disproportionately among the poor. Many low and middle income earners also still pay their share of social security taxes. So why aren’t labor groups targeting these? Especially when the benefits of eliminating or reducing these is likely to vastly outweigh the benefit of securing small wage and compensation concessions?
  3. Who are the labor union organizers? The low and middle income workers themselves, or someone else?
  4. What do labor groups require for their own existence to continue? And how would lower taxes help them if you understand where union funding comes from.
  5. Think about the impact on workers that are NOT represented by organized labor. How would lower taxes affect their competitive prospects viz-a-viz unionized workers versus mandated wage increases, for example?
  6. Congress exists solely to expropriate and redistribute the hard produced resources of its subjects. Organized labor has a powerful political interest precisely because it supports policies which artificially raise income and entitlement tax incomes for their congressional representatives to confiscate. If Congress were to find a better revenue generator than the income or payroll tax, perhaps organized labor would be pushing for something else.
  7. There is a disturbing religion of power relationships which is extremely duplicitous. If labor leaders were to push for lower taxes, they must in some sense be admitting that taxation by the oligarchs is unfair and exploitive (why else should it be reduced). But in their view of the world, government is benevolent, and it is only those who risk their personal well-being by being entrepreneurs who are exploitive, greedy, power players. But this is a perverted way to look at the world. Either people are barbaric or they are not. Just because someone is a congressman or a CEO does not alter who they are. In fact, when one stops to think about who is in a position to impose their illegitimate will on unwilling subjects, can anyone take seriously the conjecture that it is the private employer?  By advocating for lower taxes, the entire world-view of many people must fall apart.

More to come.

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