The following is a continuation of previous posts on the possible nature of socialism that excludes the power of employers as a class.
In the following, Tony Smith elaborates on the capital-assets tax, which is the basis for the generation of new investment and the supply of public goods. From Globalisation: A Systematic Marxian Account (2006. Boston: Brill), pages 304-305:
(v) The origin of funds for new investment and public goods is a flat tax
on the non-labour assets of all enterprises.16 In Schweickart’s proposal, the
rate of this tax is initially set by a democratically elected legislature, operating
on the national level. This legislature also decides on the appropriate division
of revenues between funding for national public goods and funds that are
allocated to democratically elected regional and local legislative bodies. Each
of these assemblies, in turn, must also decide upon the level of funding for
public goods to be supplied in the relevant geographical area vis-à-vis the
level of funds set aside for distribution to the level below it. These legislative
bodies can also set aside a percentage of funds for investment in areas of
pressing social needs.
(vi) After all decisions have been made regarding the general level of new
investment and the order of social priorities, and after funds required for
public goods on the national, regional, and local levels have been allocated, the remaining revenues are distributed to local communities on a per capita
basis (at least this should be the presumption in the absence of compelling
reasons to do otherwise, such as the need to temporarily favour historically
disadvantaged regions). Community banks would then undertake the actual
allocation of new investment funds to worker collectives. The boards of
directors of these banks would include representatives of a broad range of
social groups affected by the banks’ decisions. New enterprises would be
formed, and existing ones expanded, through allocations by community banks
rather than private capital markets.
The capital-assets tax assumes that the workers have right of use of most of the means of production of our lives (there may be some room for independent businesses, but they do not form the bulk of economic activity). If they do, then instead of new investment being derived from the private decisions of boards of directors of corporations, it is derived from a democratically-elected national legislature which sets the rate of the capital-assets tax.
There are two general aspects to the tax (like any tax): the flow from a source to the government and the flow of the tax to institutions. The source is the capital assets used by democratic worker cooperatives. It is a flat-rate tax based on the value of the means of production that is applied to capital assets used by workers.
The flow of the revenue generated by the tax to people only arises after deductions from revenue required for investment in projects at the national level. Once this has been deducted, then the revenue is distributed to the regional communities on a perc capita (per person) basis; the regional democratic bodies which in turn allocate investment funds for investment in projects at the regional level. The remainder is then allocated to the local community via public banks, likewise on a per capita (per person) basis.
This principle of distribution of the revenue generated from the capital-assets tax on a per capita basis means that, in areas where there is a concentration of means of production relative to the number of people who live in the area, the outflow of taxes paid will be relatively greater than the inflow of revenue from taxes when compared to areas where the concentration of means of production is relatively smaller.
The capital-assets tax is to replace interest and dividend payments. As noted in the previous post on this topic, since many workers in the more industrialized capitalist countries have at least some investments in the stock market or hold bonds, GICs, and so forth and, furthermore, pension funds are generally linked to investment, a policy that at one sweep sought to abolish interest and dividend payments may well be opposed by the working class, initially. Consequently, some form of transitional program may be necessary, one where interest and dividend payments are gradually phased out, or one where compensation for nationalization occurs. In any case, the ultimate goal is to abolish interest and dividend payments and replace them with a flat capital-assets tax.
The Abolitionary 