The following post pertains to a key aspect of the US taxation system that has not been explored in sufficient detail back in The Work-Standard (2nd Ed.). I discussed the current US taxation system regarding its obvious economic and fiscal implications. What I did not address at the time was the political implications that it poses to Hamiltonianism. Clearly, the Federal, State, and Municipal governments are capable of levying their own taxation policies. All three obtain their tax revenues from the same source, the American people.
The concept of “Fiscal Federalism” is quite simple. It refers to the question of how the Federal, State, and Municipal governments obtain the funds required to finance their operations each Fiscal Year (FY). Think of this as being intimately related to how the distribution of wealth is organized among the upper, middle and working classes. Should the Federal government be given more power to obtain a greater share of tax revenues than the State and Municipal governments? Alternatively, should that same greater share of tax revenues go to the State and Municipal governments? What form would Fiscal Federalism assume in the “Federalist American Union?”
If the Work-Standard were to be applied in these United States under Hamiltonianism, the implications of Fiscal Federalism will remain valid. Once taxation policies assume a secondary role, the question will take on different forms. In the context of the Work-Standard, this includes the LER and LERE Processes, MTEP (Mission-Type Economic Planning), the UFSTS (Unified Federal-State Tournament System), the UFSE (Unified Federalist Student Economy), the National Intranet, and the Military-Industrial Complex. The question here becomes a matter of ascertaining which political roles the Federal government should have over the creations of Arbeit and Geld across these United States. That same question can be extended to the political roles of the State and Municipal governments over the creations of Arbeit and Geld within their jurisdictions.
The LER and LERE Processes are involved in the creations of Actual Arbeit and Actual Geld, Digital Arbeit and Digital Geld, Military Arbeit and Military Geld. Every American Enterprise, from the Municipal level to the Federal level, contributes Arbeit and generates Geld for the Federal Life-Energy Reserve. Congress must determine how much of the accumulated Actual Geld should go to the States and how much should remain with the Federal government. For Actual Geld going to the States, that is to be left to the discretion of the State governments.
Although the National Intranet is to be run and operated by the Federal government, the actual Intranet Service Providers and Social Forums are to be controlled by the State governments. This arrangement is to ensure that what applies to Actual Arbeit and Actual Geld will also be reapplied to Digital Arbeit and Digital Geld. Again, the Federal government must decide how much should go to the State governments and how much it should keep at the Federal Life-Energy Reserve.
For Military Arbeit and Military Geld, it is true that the Federal government oversees all branches of the US armed forces and intelligence apparatus. But it is also important to bear in mind that the National Guard and Air National Guard are State organizations. Each State has its own National Guard formations. Whatever Military Arbeit and Military Geld created from them by conducting their military activities is yet another variation of the same question posed by Fiscal Federalism.
A similar variation of that aspect of Fiscal Federalism involves the prospect of Conscription Policy. Although Military Conscription is a Federal endeavor on grounds of promoting national defense, the same cannot be said about Work-Conscription. Getting drafted by the Federal government for Work-Conscription may not imply that one will be working in the Federal Civil Service (FCS). One might instead be working in the State Civil Service (SCS) of their State government.
American applications of MTEP will not resemble those of STEP. Anyone who says otherwise is either ignorant, dishonest, or a Liberal Capitalist. When the Federal government applies MTEP, a multitude of economic plans are carried out within the framework of a long-term Central Plan. There are various Work-Plans issued by the Federal, State and Municipal governments, each one bearing some relation to the Central Plan. Somebody purchases the Work-Plan, they contribute Arbeit to the Federal Life-Energy Reserve and expect to receive Geld from the issuing government. If a State or Municipal government issued them, they will be expected to pay the investors their Geld once they cashed in their Work-Plan after the Maturity Date. While the issuing Municipal or State government could be paying the investors, it is also possible for the Federal government to intervene and pay the investors at their behest.
The significance of such payments will become readily apparent because American Work-Plans are split into two categories. There are National-Socialized Financial Instruments (NSFIs) issued by Municipal and State governments as well as Federal-State Financial Instruments (FSFIs) issued by the Federal government. If the Federal government could intervene in the payments of NSFIs, the question of whether State and Municipal governments should intervene in the payments of FSFIs should also be taken into consideration.
We can expand the topic of MTEP further to include discussions about the American Mode of Production, Production for Eternal Glory (the American Production for Dasein), and the Unified Federal-State Tournament System. American Enterprises within the UFSTS can be split into Federal Enterprises, State Enterprises, Municipal Enterprises, and Social Enterprises. Instead of entertaining “Nationalization/Privatization,” the question under the Work-Standard takes on the form of Federalization/Socialization. An Enterprise could be operated, owned, coordinated, or organized by either the Federal, State, or Municipal governments. If certain Enterprises may be brought to the administration of the Federal government, others can be transferred to the State and Municipal governments.
Another variation is the UFSE, which is related to Education Policy. While the UFSE might have its own economic activities, they are still under the auspices of the Federal government. The Federal government could have their activities coordinated and overseen by the State governments. A Student Enterprise established in the UFSE could be transferred to the VCS Economy. If that were to occur, the Student Enterprise will still fall under the purview of the Federalization/Socialization dynamic. It could become a Social Enterprise, a Municipal Enterprise, a State Enterprise, or a Federal Enterprise.
Based on what I just described, there is a recurring trend across the preceding discussions of Fiscal Federalism. This trend can be addressed beyond its obvious economic and fiscal implications. The trend itself is related to the distribution of powers between the Federal, State and Municipal governments. In my discussions of the Federalist American Union in The Work-Standard, it was implied that the Work-Standard would grant disproportionate amounts of political power to the Federal government by dint of the fact that it is responsible for the issuance of the Sociable Currency, the United States Note (USN). However, I must stress that even in an America led by a new Federalist Party espousing an American Socialism, the balancing act between Federal power and State power will remain constant.
Certain powers granted by the Federal government can be bestowed to the State and Municipal governments. The Intent may not necessarily be related to matters like the “National Debt,” “Government Spending,” “Taxation Rates,” or the “Federal Budget.” It could just as easily be the byproducts of external developments surrounding MTEP, the UFSTS, the National Intranet, and other factors. Whichever the case may be, I am certain that we can monitor their effects vis-à-vis the Council Democracy and not just the LER and LERE Processes.
The topic of Fiscal Federalism cannot be excluded to its Hamiltonian manifestation in the Federalist American Union. In the Jeffersonian conception of America, we find Fiscal Federalism manifesting itself in policies ranging from the New Deal programs and General Revenue Sharing (GRS) to the more recent Tax Cuts and Jobs Act of 2017 (the “Trump tax cuts). In the next half of this post, I will be discussing the Jeffersonian manifestation and how it differs from the Hamiltonian version. This is important because doing so will also me to further distinguish the Hamiltonianism’s Mode of Production from the Jeffersonian one, whose applications of Fiscal Federalism functions according to the paradigm shared between Production for Profit and Production for Utility.