Taxes Are Socialist and That’s Okay

One of the things that makes me laugh the most in the debate of Capitalism vs. Socialism is that no society is 100% capitalist or 100% socialist. In reality, these two systems exist on a scale. The more capitalist the country, the less socialist, and the more socialist, the less capitalist. Here in America, our country is about 20% socialist, socialism meaning anything spent on everyone from a single source, the government, and 80% capitalist, more on how I reached these numbers later. However, people will argue over why capitalism or socialism is better. What’s sad about this is that this misaligned debate is taking over the political conversation in our country. Those on the right sit in existential fear of a complete socialist takeover, something even Bernie Sanders wasn’t advocating for, and those on the left feel like socialism as a whole needs to be how we run our country. Again, something not even Bernie Sanders was advocating for. This debate has proven to just further polarize the country and create yet another conversation centered around talking points that have little grounding or relevance in the real world.

What people need to understand is that the debate on socialism vs. capitalism isn’t a debate over the form of governance in the country but simply the debate over an economic system.

A lot of the people that advocate for socialism in the U.S. have the idea that free college, free healthcare, and a federal jobs guarantee would be socialism. While that would likely make us more like a 40% socialist country that still isn’t complete socialism. What people need to understand is that the debate on socialism vs. capitalism isn’t a debate over the form of governance in the country but simply the debate over an economic system. And when discussing economic systems there are a few numbers you should be aware of before ever starting with specific policies. One of those numbers is the U.S. GDP or Gross Domestic Product. In short, GDP describes how much money was spent in the U.S. essentially showing overall positive economic activity. Here in the U.S., the 2019 GDP was $21.43 trillion. The next number you need to understand is the federal budget. In 2019 in the U.S. our federal budget was about $4.4 trillion. It’s from these two numbers where I’m concluding the percentage of socialism that’s present in our country: $4.4 trillion ÷ $21.43 trillion = 20.5%. In other words, this means that 20.5% of the total economic activity in the U.S. is being spent from one source, the people funneling money through the government via taxes, on things that apply to everyone in the country, or at least ideally that’s how taxes would be used.

Taxes are essentially our subscription to society so that we can use everything that comes from those taxes like roads, bridges, public education, the water system, etc.

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In other words, taxes are a sound idea that is necessary to some degree to run a country, especially one of this size and population.

It is within this one simple math problem that all of the debate over our budget, our deficit, our debt, any policy requiring spending, and, of course, capitalism vs. socialism arises. Here in America, there is, to me, an odd perspective that comes from the right of our country that says that taxes are bad because that further involves the government. While I understand the concern over too much government control, pointing the finger at taxes as a whole seems to miss the mark in that concern. Taxes are essentially our subscription to society so that we can use everything that comes from those taxes like roads, bridges, public education, the water system, etc. But because of the blind pursuit of fewer taxes, this seems to be forgotten. In other words, taxes are a sound idea that is necessary to some degree to run a country, especially one of this size and population. The debate should instead center around what percentage of the overall economic activity in our country should go towards the common good.

While we may spend 20% of our money on the federal budget. Instead of that translating to 80% capitalism, 20% socialism it instead is currently translating to 80% capitalism, 15% socialism for the rich, and 5% socialism for everyone else.

Before we go that far though there’s another important fact to understand why so many people are demanding ‘socialism’ right now. While we may spend 20% of our money on the federal budget. Instead of that translating to 80% capitalism, 20% socialism it instead is currently translating to 80% capitalism, 15% socialism for the rich, and 5% socialism for everyone else. This is because our system gives greater tax cuts to the rich, allows them to avoid paying many taxes, favors massive corporations and industries, and furthermore those at the top of our society are, ironically, more likely to get free things. Additionally, the 15/5 ratio is terrible because there are way fewer people in the group getting the 15% than the group getting the 5%. Essentially, our system is entirely broken and most of us are part of the 5% benefit group meaning we’re basically living an entirely capitalist life. When seeing this, it’s no wonder so many people think capitalism is the root of evil in our system and that we need to replace it with socialism. But what if we rethought the 20% spending?

Here’s what American society could look like with only 20% true socialism, meaning that the entire 20% being spent on things that benefit everyone. First, we could easily afford a Universal Basic Income that provides everyone with $1,000/month allowing people to purchase their necessities from food and rent to healthcare and commute costs. We could subsidize healthcare costs, we could still maintain the ridiculous military budget, still fund social security, massively increase the money spent on education, we could subsidize the cost of healthy foods instead of processed foods, we could fund a worthy space program again, we could fund a local journalism fund, we could fund a federal Democracy Dollars program which would allow the people to fund elections instead of corporations, start to pay off our debt and deficit, and much much more. All with the same 20% we are currently wasting on things that hardly benefit people and that create many problems.

A lot of the problem people have with taxes isn’t taxes in general but instead the fact that our tax dollars are not spent in a way we approve. At that point being taxed does feel like theft because taxes are supposed to go towards the common good but instead, those tax dollars are going towards inefficient, means-tested, targeted programs for the poor, and across the board aid for the rich.

All of this is to say that the problem isn’t that we need more socialism, aka more taxes, but instead that we just need to spend the money we already have in a better way. Until we’re able to do that anyway, why would we even consider giving the government more money? This just confirms the fears on the right that we would be giving the government too much power because they are already irresponsible with the money they have. A lot of the problem people have with taxes isn’t taxes in general but instead the fact that our tax dollars are not spent in a way we approve. At that point being taxed does feel like theft because taxes are supposed to go towards the common good but instead, those tax dollars are going towards inefficient, means-tested, targeted programs for the poor, and across the board aid for the rich. But the idea of taxes going towards the common good shouldn’t be lumped in with this criticism of the current system.

Taxes are socialist, and that’s okay. The real problem people have with increased taxes and spending on the general population often isn’t the principle behind it but the execution. So people on the right, the next time you talk about how bad socialism is, remember that you likely dislike socialism only aimed towards certain parts of the population, which isn’t really socialism but just America’s sad attempt to avoid socialism by trying to do it in a capitalist way that just created more problems. And for those on the left, before you demand a socialist system, look towards fixing the way we spend our money because, chances are, the money we already have in our system could easily be redirected to be more beneficial and fix many of the qualms you have with the current system.