I bumped into a Wutlander friend, in Alhambra of all places, and we ducked into a Yum-Yum for a while, to talk. Obama was on the television speaking about taxes, which prompted my friend to jump into a comparison with the taxation system back in Wutland. “Wutlanders revere opportunity. It’s on our currency.” Taking a bite out of his fritter, he told me that the capital gains taxes are very high in Wut, but that estate taxes are even steeper; enormous inheritances are obscene to the public conscience there. “Those taxes, all those moneys, go to supplement lower wages. It’s called Tuning Laws.”
He went on to explain: in Wut the minimum wage is a living wage— tied to some basket of goods necessary for a well-rounded, decent life. Other nations have this in place as well. Australia’s is almost 17 bucks, which explains why you see them everywhere, globetrotting even on gas station wages. Wutlanders go a step beyond. The first shots fired at nearly any minimum wage hike is that it hurts small business owners and, with less total pay to shell out, decreases the number of jobs available on the “job market.” In Wutland, he told me, the business actually pays about the same the minimum wage that we pay here in the U.S.— sometimes less— but that the revenue raked in from capital gains, estate, and even corporate taxes is added on as a supplement to push the actual minimum received by the worker up to an equivalent of over fifteen American dollars. You can see the beauty of this balance. The key is that this measure supplements, scales, and tapers in order to maintain a responsiveness to supply and demand rather than just “leveling off” (even from zero) or “paying for nothing” as it did with the Speenhamland System and other basic income systems.
The Tuning Laws are very popular and it’s easy to see why. Businesses can hire more workers, and workers can live with dignity and without desperation, even at starting wages. It oils the engines of production: work is created, incentivized, and precisely rewarded. This, he pointed out, is the complete opposite of capital gains and inheritance, in which money either begets money or falls into your lap as a grand prize for the death of a loved one. “This is crazy for us,” he said. “These huge inheritances are completely against what we call the Rights of the Child. How can you justify that fifteen, twenty years of your life are so completely dependent on whom you chose as parents? It’s like a twenty year headstart, or a fortune, for doing nothing. So crazy.” In this sense, the Tuning Laws are like “hypothecated” taxes that are placed on a vice or ill to ameliorate their effects, such as liquor taxes that go toward recovery programs. The excesses of capital— both of the speculative and patrimonial form— are taxed both to curb them and to ameliorate their ills. “Of course,” he admitted, “we still have our problems.”