To answer the question it's useful to look at the relationship between these rival imperialist powers as described in "Imperialism's march toward fascism and war" by Jack Barnes, published in issue no. 10 of the Marxist magazine New International. Under the subheading "U.S. gains an edge on imperialist rivals," Barnes writes, "With the partial exception of the United Kingdom, the capitalist powers throughout Europe are three to four years behind the U.S. rulers in `downsizing,' cost cutting, and imposing what the employers call `labor flexibility.' They are behind their U.S. rivals in extending workers' hours. They are behind in slashing wage rates, implementing multi-tier wage agreements, and gutting the social wage."

Ronald Reagan and Margaret Thatcher, former U.S. president and UK prime minister respectively, led the capitalist offensive in the imperialist countries in the 1980s, dealing major blows to the labor movement. They succeeded to some degree in cutting the social wage and shifting further the distribution of income between better- off middle-class layers and the working class. Large numbers of professionals and other petty-bourgeois layers prospered while the capitalist rulers dealt devastating blows to broad layers of working people.

The aggressive "free market" capitalism a la Reagan and Thatcher included some cuts in taxes on corporate profits and increases of regressive levies that shifted the tax burden further on working people. By the end of the 1980s, these tax increases, combined with rising interest and mortgage rates, began hitting broad sections of the middle class as well as workers and working farmers.

Although this went the furthest in New Zealand, the United States, and the United Kingdom, it was a pattern throughout Europe too. In Sweden, for example, a social- democratic government in the 1980s carried out "reforms" that shifted the tax burden on workers by making taxes flatter. Value-added taxes and assessments on alcohol, tobacco, and gasoline were raised. At the same time, the government lowered taxes on corporate profits and capital gains. The government of former premier Carl Bildt of the conservative Moderate party continued this course at the beginning of this decade. The current social-democratic administration has raised taxes that affect workers and the middle class.

In Germany the administration of chancellor Helmut Kohl considerably raised taxes after German reunification, reversing pledges in the 1990 election campaign to do the opposite. In July of that year the government imposed a 7.5 percent tax surcharge on personal and corporate income -dubbed the "solidarity tax" and justified as part of Bonn's efforts, unsuccessful thus far, to swallow the workers state in East Germany. Kohl also imposed higher levies on gasoline and the use of telephones.

Advocating cuts in taxes on income from capital, supposedly to spur economic growth, has been the stock-in- trade mainly of conservative and, to a lesser degree, of liberal politicians in Germany and Sweden recently - the countries I am most familiar with. Social democrats in these countries, however, are less outspoken about tax reductions. Bildt's Conservatives have recently gained some support among working people in Sweden by campaigning against high taxes - in the latest polls his party ranked higher than the social democrats.

Other workers, duped by arguments from social democrats, identify proposals by capitalist politicians to reduce taxes with lowering taxes for the rich and gutting social services.

Under capitalism, the entire tax system is set up to obfuscate how workers are exploited, to confuse the toilers. We are made to think that everybody has to "contribute" toward fixing roads and building schools. But workers, working farmers, and other exploited producers are the classes who, along with nature, produce all wealth - including the portion that is used to build bridges and do other public works. The wealthy minority that rules, and doesn't work for a living, expropriates the lion's share of the value workers add to commodities through their labor.

Value-added and sales taxes, which assess the richest capitalist and the poorest worker equally, are the most regressive form of levy and adversely affect the working class. Class-conscious workers advocate a sharply graduated tax on income in order to shift the tax burden off working people. As the Communist Manifesto explains, communists are for the abolition of all taxes and their replacement with "a heavy progressive or graduated income tax." This includes taxing wealth from capital and other income of middle-class layers - from opera singers to well-paid athletes and other professionals - as long as the threshold is high enough to exclude workers and other exploited producers.

The differences in the rates of taxation between France and Germany on one hand, and the United States and the UK on the other, reflect the progress the respective ruling classes have made in shifting income distribution further in favor of the upper middle classes and the capitalists. Kohl would also like to cut taxes on profits and gut social services as part of the German rulers' efforts to shore up the weakening deutche mark and declining profit rates. Resistance to such proposals from the social-democratic opposition in Germany, as well as some of the policies of the new social-democratic regime in France, reflect the degree of labor resistance in these countries over the last decade to capitalist austerity. The recent strike by the Teamsters against UPS in the United States and other labor battles, though, point to growing problems for the bourgeoisie within the strongest imperialist power and prove that the Reagan-Thatcher course was ultimately a failure for the rulers.

Post also asked whether capital gains taxes in France were raised from 19 percent to 41.6 percent. The answer is yes. These taxes apply to the profits investors make on selling their stocks, real estate, or other assets.

- CARL-ERIK ISACSSON  
 
 
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