Populist politicians and dumb authors generally oversimplify matters. Like: we should cut taxes to stimulate entrepreneurship and reduce the governmental burden on businesses. Taxes are there to keep those nasty left-wing treehuggers happy. As the more intelligent reader will recognize: the truth is actually quite different.
First of all, it is important to realize (as populists and many journalists tend to forget) taxes are not a matter of ‘them‘ taking money from ‘us‘. Taxes are a way of making sure that everyone chips in for the stuff that we all need. So, evading taxes, should not be an acceptable subject during birthday parties, but seen for what it is: making others pay more for the stuff that you are equally benefiting from.
Anyhow, that’s a little beside the subject. What I would like to explain, in a clear and easy to understand manner, is that entrepreneurs (and all sorts of wealthy people) actually benefit from taxes and do not suffer from it. And I will conclude with: so, stop whining about. Don’t say I didn’t warn you in advance.
Below, seven easy to understand reasons why anyone who says taxes are theft and should be cut back to the absolute minimum did not really think it through, or might be slightly bonkers.
1. Taxes can help to make sure that everyone in society stays a consumer. In several developed countries (i.e. the countries that rank highest on the UN list of ‘countries with a high standard of living)’taxes are used as a means to provide citizens that have virtually no income with an monthly allowance. This means people remain consumers. Which means capitalism is the winner.
2. Takes can help to make sure that everyone in society has something to lose. If you consider the alternative, say: through no fault of your own (an accident) you lose your job and you income and you are unable to find employment after that. If you have no income you may end up with nothing, which also means: nothing to lose. Who would not start stealing to feed his/her children? And some might end up doing far worse than stealing alone. These taxes are a more efficient way of providing safety in society than jails.
3. Taxes pay for a safe society. And we’re not just talking ‘crime-fighters’ like police-officers and the military here. How about traffic lights? How about providing a legal system that can settle an argument between you and your neighbour over that fence, without having to stab one another? How about the laws that say what the minimum safety requirements are for a children’s bicycle?
4. Taxes build and maintain infrastructure. Don;t you think that might be helpful for commerce?
5. Taxes in a democratic society is an effective way to prevent corruption. Nothing is as bad for an economy as corruption. If you do not have independent civil servant or a well functioning justice system: just forget about the economy and get out of that country. The people that work to keep the economy functioning -meaning: the ones on the governmental payroll- deserve to be paid. Taxes make sure they don;t have to get creative in finding payment.
6. Taxes make sure your long term interest is looked after. Small companies, large companies, no one cares about the long term. Shareholders preferably want their money yesterday. So no one is willingly going to invest in care for the elderly (which will be you in the future), of the environment (which is where you will be living in in the future). If you’d like to be a healthy and wealthy pensionado in a couple of decades, the best way to make sure that happens is to pay your taxes.
7. Taxes will pay for education for the generation after you (like it paid for your own). Teaching children might be a calling, it is not a hobby.
Obviously, all these reasons to pay taxes go right out of the window if you’re living in, for example, a non-functioning democracy. And of course there are improvements to be made in terms of efficiency within every governmental organisation. but the same applies for every commercial organisation as well. Heck, you are not a 100% efficient yourself. And of course some taxes are spent on things you do not think are important or necessary. Some stuff you feel is important probably isn’t important at all to someone else.
Taxes have paid to build a society (schools, safety, infrastructure etc) that made you as prosperous as you are today. So, making use of all those benefits and then pleading to cut back on those benefits (by cutting taxes) for others, or even leaving the country for a so called low-tax state, is nothing short of immoral. Taxes make happy. So stop whining about it.
Filed under: business, capitalism, consumerism, corporate, free markets, freedom, government, society | Tagged: business, consumers, entrepeneur, financial, government, money, politics, tax, taxes
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!
quote:
“3. Taxes pay for a safe society.”
“4. Taxes build and maintain infrastructure.”
Well yeah I guess it’s nice to have a food safety department to inspect the peanut butter.
The potholes on the freeways need to be repaired and somebody has to replace the light bulbs in the traffic lights.
But lets be truthful.
I mean seriously lets have some honesty here okay?
How much of my taxes is going to “core” services? —> just a fraction.
Most government spending is nothing more then “income redistribution” aka “robbing Peter to pay Paul.”
Government is an institution where I only get $1 back for every $2 I pay or was that $3!
You think I’m joking?
Look at Hong Kong, the top tier tax rate is only 16%.
That’s all the taxes that’s need to provide safety and infrastructure. So why am I being expected to pay 40%?
Thank you very much for your reply. I really appreciate the fact that you took the time to write down how ou disagree with me.
Obviously, any good government would do a lot more than merey the points 3 and 4 you quote. Taxes pay for education, for a legal system that sees to it that financial transacions can be made and get paid. It pays for fire fighters that may stop companies from burning down. It sets up rules for the use of radiowaves so we can make calls on our cell phones and listen to the radio at the same time. I’m not saying any government is perfect, because governments are people and people aren’t perfect. Democratic governments are ‘us’. And sure,you may compare how much of your income goes to taxes with how much of your income would go to taxes if you lived in any other nation. But I say you should look at the entire picture, ot just what percentage of your wages you have to invest back into the community you live in.