Daily Times

Governments do not have a right to collect tax. Taxes are payment for goods and services we allow governments to provide instead of doing it ourselves in the private sector. Brazilian President Dilma Rousseff’s impeachment trial and the British Prime Minister David Cameron’s faux pas-paved London Anti-Corruption Summit (LACS) for the “fantastically corrupt” have one thing in common: they teach us we cannot maintain a stiff upper lip against the state-sanctioned theft of our taxes. Taxpayers must unite to restrict government to what they may provide and ensure we are not taken for a ride. Politweak outlines the need for every country in South Asia to have it’s own ‘taxpayers union’. On 14th May when Voice of Indian Taxpayers (VIT) was launched, more than 400 people attended with less than a week’s notice.

Seven-time historic debt-defaulter Brazil, during 13 years under Roussef’s Workers Party, has racked up a debt of 70 percent of GDP, placing present and future generations of taxpayers in the seventh circle of hell. Brazil’s economy has been contracting by more than three percent for two years due to high taxes and the government borrowing money meant for businesses. Rousseff has been suspended, facing trial for ‘creative fiscal accounting’ during her 2014 reelection when she hid the budget deficit to borrow $11 billion to boost spending to augment her appeal to voters. Governments use welfare provision and only re-examine tax burdens they place on us citizens if they can convert the initiative into a campaigning tool for political parties. It’s time we establish non-partisan, independent tax lobbies like VIT to mainstream tax transparency, accountability and reduction.

Brazil’s state pension scheme, for no demographically sound reason, covers approximately one in three Brazilians and accounts for 13 percent of GDP, making a strong case to do away with the legal retirement age suffocating the economy. Accessing money from taxpayer — present and future (due to wanton borrowing) — meant for a comprehensive welfare state, 60 percent of all legislators face corruption charges.

It took interim-in-charge Michel Temer a day to name the cure: reduced government spending, slashing ineffective welfare schemes and basing coverage on need rather than universal eligibility, privatisation of state-run companies, and a cabinet shuffle in favour of pro-business politicians. This is a welcome break from the traditional thieving remedy of government borrowing — raising the shortfall revenue by increasing taxes, fines and licences, and printing paper money to pay debt at the cost of devaluing ordinary consumers’ purchasing power. Had Brazil been an effective tax union, citizens would be able to embed tax and welfare considerations at every level of policy making and decide the tradeoffs between consuming and insurance themselves, instead of it leaving it to ‘political benevolence’.

Taxpayers must re-examine history to understand over-taxation is theft. Historically, taxation was a wartime activity to expand, maintain and defend empires as it paid for bureaucracies and armies. British law still recognises income tax as a wartime necessity originating from having to war with Napoleon in 1798. Government’s right to collect income tax expires and is renewed every year since on 5th April.

Before Cold War competition converted the matter of how much income it is desirable to appropriate in tax into ideologies, the amount of tax payable was simply how much people were willing to pay to be protected from armed governments (domestic and foreign), or each other, and later to collectively leverage infrastructure that were natural monopolies. Tax competition evolved from rival empires competing to be more attractive to controlled populations. As the Roman Empire declined, the Islamic empire rivalled it by requiring tax of only one-twentieth of earnings instead of one-tenth.

Recently governments have patronised technocrats to manufacture counter-intuitive justifications to appropriate more tax so they can spend it ‘for our own good’ as though they were nannies, instead of being of the people themselves. Socio-economic differences have been cleverly spun as class wars, necessitating ‘government intervention’. These interventions confiscate larger proportions of income from every productive member to ‘redistribute’ to the poor as though wealth were fixed, and not as it is in reality, a product of prodigious creation of demanded goods/services.

The flipside has been the cynical obscuring of poverty alleviation by vested interests. Poverty is seen not as a matter of needing to work and hone capabilities but something inherent, eradicated only by concentrating taxes in the hands of distant public officials to design extortionate, out-of-touch welfare nets to cover the poor from cradle to grave. This sticky web ensures governments’ entrapment of wages and control of the poor in the name of insurance and biosecurity. Where the Pakistani state failed to establish schools in FATA, madrassas filled the education gap, only to be subverted by the anti-Soviet CIA, ISI and Saudi Arabia who weaponised literacy and educations, as all public education does to varying extents. There is a strong case for privatising sectors and stop governments from profiteering.

Punitive tax hampers job creation, the only thing that ends poverty. The free market is demonised despite being the largest mechanism for poverty alleviation. Capitalism is responsible for lifting a billion people out of extreme poverty in developing countries between 1990 and 2010 alone. Three quarters are Chinese directly benefiting from Deng Xiaoping’s [free] “market with Chinese characteristics.”

Those awaiting Cameron’s LACS earlier this week with baited breath are probably now blue in the face for its total disregard of the impact of corruption on ordinary taxpayers. Instead public revenue has been squandered on a state-centric huddle of 41 countries to publish the ownership details of companies offshore to prevent tax competition. Cameron proclaims, “The gold standard that I will push for, as long as I have breath in my body, is public registers.” Little wonder as the UK is among the biggest losers to neighbouring tax havens like Ireland because of its business-unfriendly tax regime and the exodus of the majority of its manufacturers to emerging industrial powerhouses. Those salivating at the prospect of $71.8 billion in additional tax should snap out of it because the summit does nothing to prevent South Asian plutocrats from plundering public resources.

Parallel powerful interests have also been addressed like tackling high level graft between MNCs and officials, conveniently neglecting to specify any good practice benchmarks for the common man who pay far more in bribes to the same officials every day, like reducing the human interface through digitisation to minimise bribery while procuring licences. Spain conveniently called for Big Brother surveillance of our technology to tackle “organised crime.” Afghanistan fought back, accusing the powers that be for pouring billions of dollars into the country with little regard for transparency or efficiency. The beneficiaries are corrupt Anglo-American companies and violent cartels furthering the interest of great powers at the cost of security.

It is plain to see the self-serving nature of welfarism, LACS and the global culture of governance. The cause of corruption is governments themselves who continue to misuse wages as part of their welfare state consensus. LACS’ cosmetic attempts at naming and shaming owners of offshore companies and properties is akin to ignoring the holes in our corruption-ridden welfare states and scooping back very little of our stolen taxes, only for it to find domestic outlets like granting public contracts to cronies. Food security programmes are notorious for producing cattle feed and increasing malnutrition among our poorest children. India’s Maharashtra Chief Minister Devendra Fadnavis admits top-town welfare fails. Despite trucks being fitted with GPS, water did not reach drought-hit Maharashtra as the devices were refitted to motorcycles to indicate delivery.

A wise person once said, “Axe not what your government can do for you, but what you can do to axe tax.” It is time that we form country-specific taxpayers’ unions to retake control of how we spend our income instead of writing governments a blank cheque every time they produce a budget.

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The writer is a politics and governance professional, integrated media strategist and Gross National Happiness researcher. She can be reached on Twitter @LatoyaFerns