24 March 2006
Political comment
By
Marc Alexander
Tax - a state sponsored weekly mugging
Trying to justify the amount of taxes we pay, other than avoiding trouble from the IRD, is like searching for a gas leak
in a dark room with a lighted candle. There can be no reasoning that will satisfy everyone because what constitutes a
reasonable rate will vary according to the expectations we hold of government's role. And, to a certain extent, on just
our relationship to the tax take - are we a taker or a giver? Everyone has an opinion about what they should pay
(generally lower for themselves and higher for those on bigger pay packets) but rarely do we question the necessity of
taxes in the first place. Maybe we should.
We can begin with one salient truth: governments can only spend (or go into a level of debt) up to the amount of wealth
(or debt repayment) it accumulates as revenue from the creative endeavors of private enterprise. The more 'services' it
provides, the more aggregate wealth is needed to pay for it. The problem - in a nutshell - is that other than the freely
accessed gifts of nature everything else must be paid for. Some government spending is necessary to provide those common
goods that industry alone cannot; public works and core services beyond the scope of private interests such as roading,
fire departments, justice system etc. The litmus test here is if its provision is more necessary to taxpayers
collectively than could be provided individually had it not been taxed from them. The problem is when governments try to
justify their expenditures (and therefore a higher tax take) by identifying those necessities that are in the
governments' interests rather than the publics. In other words vote buying.
Think of the example of Labour's Working for Families package: is it tax relief or an extension of the drift-net of
welfare?
Some have tried to argue that Working for Families is a tax reduction package aimed at 350,000 families because it
returns a sliding proportion of tax paid back to the families that paid them. A kind of refund if you like. But those
that argue such things are deluding themselves and fooling no-one. They pretend to be the friend of business because
they hate to hear themselves sounding like a socialist apologist. Any power that the state chooses to exercise in doling
out tax dollars on the basis of its own criteria is by definition plying a form of welfare. By contrast tax relief is
money you do not have to hand over to the government in the first place.
The increasing economic intrusion into our lives by the government, comes at a heavy price. More of the wealth we create
is removed from us to pay for more income related social deficits. This government has justified its collection of
mammoth surpluses in recent years (up to $54 billion over the last five years) by the very problems it helps to create!
It's like standing there trying to fill a bucket of water with the government poking more holes into the bottom to
siphon off more water to help you fill it up.
Over the years successive governments have 'creatively identified' an ever increasing multitude of small social ills
which it then resolves to 'fix'. These solutions are generally worse than the problems they identify. The ensuing
studies, policies, commission of inquiries invariably result in the spewing of a legislative tide which act in as
fertilizer on the problems they attempt to remedy, growing them into full scale problems. Meanwhile what started out as
a minor idea in the head of some pompous socialist minister, drunk on his own importance to secure his historical
significance, ends up creating parasitic institutions (kindly referred to as bureaucracies) concerned only with
justifying their ravenous need for more public funds!
Why is it that when this Labour government talks of modest indirect tax increases it ends up costing a few hundred
dollars but when it tries to buy an election with bribes of 'massive' tax cuts, its only worth a stick of gum?
Governments shouldn't be elected simply to redistribute wealth. Not only does such an ideological aspiration drive our
most enterprising offshore (currently at over 650 per week dampening our wealth creating potential), but more
importantly, gives a perverse incentive to lie and cheat our way out of our obligation to contribute. Ultimately the
very people who need help the most are buried under an avalanche of recipients who have no incentive to do otherwise!
Frankly I'm ashamed to live in a country that can pay $45,000 for 'hurt feelings' to a criminal yet forces our sick to
go on waiting lists that compromise their health; or never-ending legal aid to delinquent parents who continue to
assault their endless supply of children making no demands that they should be brought to account and sterilized, while
our elderly remain marginalized; or that while millions of dollars get swallowed up in Labour party advertising passed
off as legitimate informational expenditures, we have children who can't read and write and go to school without a
decent belly full of food. And yet…the tax take gets bigger and bigger.
Instead of demanding increased resources to service our problems, we should ask why it is that in spite of massive
increases in welfare payments, our problems just get bigger. I suggest that at least one reason is that we are working
harder to pay off an ever increasing tax burden. Increasingly our tax obligations and consequential governmental
meddling have relegated us to have much in common with slavery. No wonder our families are struggling! They spend more
and more time trying to pay off the needs of families other than their own!
We become slaves when we are rendered so incapable of self reliance and belief that we look to government to save us
from ourselves; when we demand from government those things we can and should do for ourselves but prefer instead act
like petulant children demanding they be done for us. We are slaves when our shortcomings become the fault of others and
we eschew self determination and responsibility. We are slaves when we become so dead to the feeling of liberty that we
willingly or unwittingly surrender the duties and rights implied by as members of civil society.
We can ill afford to lose the equilibrium between our individual assertion of liberty and social obligation. That means
that instead of giving up our values we should be rediscovering them. It means understanding the difference between the
need for providing genuine compassionate welfare to those who require it rather than simply rewarding laziness. It means
being capable of discernment between discipline of ourselves and our children rather than descending into the chaotic
wooliness of self-indulgence.
We have allowed political power to intrude into our daily lives beyond all reasonable need and abandoned the bedrock
values of our forefathers - the civic foundations of our nationhood - and mistakenly we have called it enlightenment.
The best thing we can do to help ourselves is to tell this government to back off and get out of our lives; to allow us
to make the decisions that affect us most; and stop deciding for us what we should eat, how much we should earn and how
we should live. From time to time we should ask what we expect our taxes to do for us; and do we benefit in a way that
the alternative, leaving wealth in the hands of those who created it, would not?
The greatest service any government can give its people is to empower them to live free - not to crush their spirit and
diminish their dreams. We are a resilient people and some of us still have aspirations - and hell yes we're prepared to
defend them.
ENDS