Friday, August 12, 2011

What should we do about taxes?

It appears to me that some of the challenges we have, and all the European and United States governments are having, goes back to a discussion and reassessment of the way we all pay taxes. 

Who should pay? This is part of the discussion, is it not? 

Should we raise taxes on the rich, the middle class or the poor? 

Cutting benefits and pensions appears to be a preferred way to cope with any crisis.

 Currently it is salary and wage earner who pay the most per dollar earned and the rich by using their various accountants have ways to set up many trusts and havens to protect their profits and reduce the tax per dollar earned. 

Even government encourage tax avoidance and in our country there is to be no more gift tax, so more money can be given away to Trusts and hidden at the lowest tax rate.

Even the discussions surrounding the present huge swings of the stock market sometimes touch on tax issues.  Should the Europeans pay more tax or should Greece and Portugal be bailed out by Germany?  Should the US plug the gaps in the US tax system and take more tax from bonuses and from the purchase of private jets and luxury yachts.    .

This is called tax avoidance is perfectly legal, but I question how often it is ethical is it fair or equitable?   

There are so many examples of legal ways to avoid tax and many of these systems enable the richest people of the world to use shelter for their profits by using a wide range of Trusts, countries providing tax havens, by deducting all they can and capitalising expenses and profits.

We have watched with amazement how the Republicans have behaved.  They refuse to allow Obama to tighten up the “loopholes” in taxes, let alone raising taxes to pay for the wars that their President George Bush started.  The poor are still paying for these wars, not only with their lives, but in their taxes.  

The rich use the tax avoidance mechanisms manipulated by their accountants to ‘save them’ from paying taxes. This is so often because of greed, but also from a kind of blinkered attitude to the plight of anyone poorer than themselves.

The very rich will argue that tax avoidance is not illegal and they are probably right. They also argue that they are stimulating the economy by spending and employing others.

Tax avoidance on the scale we now see it is, I would suggest, unethical and it certainly doesn’t help us to have a balanced society.  I particularly like the New Zealand Labour Party’s policy of Capital Gains taxes - at least this could bring a balancing of the tax burden, though I am sure the rich will find ways to avoid even the 15% suggested as the amount of the tax.

I find it incredible that it is the Republicans (particularly the Tea Party) who very often come from the religious right appear to have a weird view of what is Christian. 

They believe that they need to protect the profits of their members.  This is extraordinary, and in my book certainly unchristian.  Oh yes in the USA there will be cutbacks and easing of government spending, but the brunt of this will fall on the poor and the lower middle class, while the super rich will still fly their corporate jets, write off against tax their super yacht and continue to travel to Europe several times a year – of course First Class.   

One could look at the word tax a different way.  Tax is “ an amount of money levied by a government on its citizens and used to run the country, a state, a country or a municipality, but it can also mean an amount charged to members of a club or organisation to be used for expenses” Your wealth or power is acquired with the help of the society, its systems and its resources, so what you return to it is merely repaying what it has put in your hands.

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