Tax is not treated comprehensively in any of the major political-economy texts of Marx and Engels, but is instead covered piecemeal, predominantly in their journalism, occasionally in their letters. They supported progressive taxes, both on capital and income, had a strong preference for direct over indirect taxation, and back restrictions on inheritance. The tax landscape of Marx and Engels is clearly different to our own – in 1849, indirect taxes accounted for 40% of the Prussian Royal Finance Ministry total tax take, and direct taxes, only 29%, whereas today in the UK or Germany, indirect taxes are in the minority, with direct taxes generating around two-thirds of the total take. Indirect taxes are expected to account for 28% of the UK total tax take in 2018-19. The poorest UK households currently pay twice as much of their disposable income in indirect taxes, a clear driver of net income inequality.
Many social scientists have worked to understand the lasting effects of the Reagan years on social inequality. Far fewer have focused on the effects of the Clinton years.
This Life is a profound tour of our inner life and purpose that deftly weaves in religion and political economy, with an eye always to the future. But it fails to appreciate the profound worth of institutional changes that might reallocate powers and capacities to exploited people here and now for its chief goal, spiritual freedom.
Social scientists should assuredly keep the structural constraints of capitalism in mind when developing state theory in the 21st century. However, we should not lose site of the fact that individuals also make history, and that a single-minded focus on the structural constraints of capitalism may only lead to a functionalist interpretation of the state, alongside a cynical approach to politics.
To preserve its position, capital has no other choice than to curtail democracy. As class conflicts heightens, the need for authoritarian governance, “preventive fascism,” grows.