Wednesday, December 19, 2007

Why people pay tax?

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I think if you were able to get an honest judgement from people, or were able to convey all the facts, and were able to join all people that dislike tax, I think they would conclude that taxation is one of the greatest scourges of all time, one of the biggest scams. I have outlined what I believe are the reasons why people pay tax - some of them are related:

  1. Fear: A lot of people pay taxes because they are worried about the negative consequences of paying taxes. They are worried about being powerless to prevent the tax office from trashing their lives, or from being sent to prison. The implication is that there is a gun pointing at their heads requiring them to pay taxes. Few are willing to call the bluff of the tax office. Few are willing to publicly air their grievances, and they would likely get little support from the media. In the modern era, principles have little status. Lobby groups have standing. Irrational unions have power not because they have a good argument but because they are a threat to vested interests. Intellectuals are cowards. We have soldiers that go off to war to fight the physical battle, to risk their lives, but intellectuals duck for cover at the sight of an intellectual battle. Why? They have no army. In fact, most intellectuals are the enemy because as academics, bureaucrats or teachers, they are supported by government. They live safety, they hate accountability.
  2. Priorities: I guess a lot of people look at their hierarchy of values and decide to place the limited freedom they have (ie. paying ≈40% tax and accepting a string of other immoral laws) above the risk of even greater expropriation or a prison sentence. These risks are real for a few people, but governments don’t have a moral argument, so if enough people are critical of government’s right to tax, then there is the prospect of change.
  3. Illegal: Not paying tax is illegal. Alot of people stop there and dont question the legitimacy of laws. I have listed helplessness below, which breeds acceptance of bad laws. The foundation of legitimate law are moral arguments, but a great many intellectuals throughout time have undermined the status of reason. For this reason, if you were to mount a philosophical/ethical argument against taxation, a lot of people would discount it as having no objective foundation. They would say 'its just your opinion', 'there is no objectivity'. This anti-science, anti-reason thinking, or non-thinking has permeated society for a long time. Its why we listen and embrace the 'mob', the majority, but the problem is the current system gives the majority a moral righteousness they dont deserve, resulting in government in having powers they dont deserve, and more importantly the capacity to act with impunity, free of accountability. There is no rational justification for one person, collective, representative or claimant being able to initiate the use of force upon another as a system of government. Its indefensible. They dont defend it. They just act with impunity. No country has debated the ethical legitimacy of taxation - it was imposed by tyrannies, feudalist governments, or accepted by default, for lack of an intellectual debate of the matter.
  4. Perspective: A lot of people accept taxation because they have known no other system. Only students of history might question the legitimacy of taxation because they understand how tax was introduced. Other people tend to accept that the system was there when they were born, it will probably be there long after they die.
  5. Hopelessness: A lot of tax payers might disagree with taxation or the amount they pay, but consider themselves as having no power to change the system. That lack of power stems from recognition that throughout their life, reason has not been the standard of value. Power is what counts, and power is won by controlling perceptions, and you need an audience to do that. The mainstream media are gatekeepers with powerful political friends, they are not allies.
  6. Alienation: A lot of people would not consider not paying tax because, quite apart from the physical threat of having their wealth expropriated, they are worried about being alienated from society, who seems to embrace the idea of paying tax. If tax evaders were organised as a group, they would have a possibility of gaining credibility by mounting a moral argument in defence of a freedom without taxation - which is actually a contradiction in terms.
  7. Guilt: Related to alienation is the sense that people without a strong conceptual grasp of the immorality of taxation are inclined to feel guilty for not paying, whether its because they have some level of doubt over not paying tax, or because they might be hurting family, or might genuinely want to help people through taxation. These people are not likely to oppose tax because they have a collectivist psychology.
    Practical: At some level there are a lot of people that think its more practical to pay tax. Aside from the fact that they get to stay out of prison, their thinking is that whilst the taxation rate is 40%, their happy with 20% of the way tax is spent, and 60% of the services they get. Of course they are not inclined to evaluate the depth of the impact of government – that is another post in itself. But in some sense they rationalize that ‘if the government only expropriates half’ then you are free. Never mind that you are taxed in income, taxed on savings, taxed on superannuation, and then death duties. They only stop with what they can get away with.
  8. Diminished responsibility: A lot of people don’t believe in paying tax, but they nevertheless do it because they don’t want the responsibility of being a victim. They would rather be a victim paying 40% tax and dealing with the frustrations of poor government, than being the type of victim who confronts the uncertainty of having their savings expropriated from their bank account, or the type who spends time in prison for evading tax. They would rather someone else shoulder the responsibility. We have soldiers that go off to war to fight for freedom, fighting a brutal physical battle, but it seems intellectuals are such cowards when it comes to fighting battles against lesser minds. You might ask why? I think the reason is that they have no army. They are not organized. They are all frustrated individuals who live in hope, and just keep their heads down. Ducking for cover.

People of different countries of course have different attitudes towards paying tax. Americans ans Chinese seem to have the greatest contempt for taxes. Americans are the most vocal in expressing their contempt for them. In fact the US constitution gives the US government no power to tax ordinary citizens, only companies. Yet that has not stopped the US government from doing just that. You might ask why it happened. Clearly there are political leaders who have little regard for the role of the constitution, and still less respect for reason, that they feel compelled to disregard people’s rights and just impose laws that they are not legally entitled to enact. See the documentary http://zeitgeist.com for more information.

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