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Tax is OK

Unlike many people I don’t mind paying tax – I really don’t. But there are some things about the tax system which I do find quite offensive, and I can see why some people do object, although ironically usually for reasons quite different to mine.

We need a tax system because despite what libertarians and other extreme ideologs claim, the free market or private enterprise or whatever else you want to call their “religion” doesn’t always get the best results for society (in fact it rarely does).

For example, basic research with no obvious commercial outcome is not likely to be done by a private company. And good quality education is unlikely except for the small minority who can pay the huge fees demanded by private education organisations. And few private investors would take on massive projects which only have very long term benefits, such as a space program.

So if these points are true (and I think experience of the real world shows they are) we do need a tax system so we should be happy enough to participate in one. But I do have problems with the tax system in New Zealand (which I think is similar to most other countries). But what are these problems?

First, there is fairness. I would be happy to have a flat tax system where everyone would pay the same rate as long as everyone had a fair income. If everyone’s income started at a level which allowed them to live comfortably and if the very top earners didn’t receive grossly inflated amounts I would say sure, let’s all pay the same tax. But, of course, that’s not the way it is.

So we should have a tax system which helps level out the gross unfairness of what people are paid. Anyone who claims that people are paid what they are worth is just talking nonsense. The only justification for that belief I have ever heard is a sort of circular argument where they say a highly-paid person is worth what they are paid because they get paid what they are worth. Surely everyone would accept that many people make a huge contribution and are paid very little whereas others get paid a lot for doing either nothing or actually making a negative contribution.

So tax should be paid by those who can afford it. In most cases they will also be the ones who gain from how that tax is used: they use the highways and other infrastructure, they pay low wages which are topped-up by the government, they exploit the discoveries of science for their own commercial purposes. But even if they didn’t, I still think that making those who can afford it pay the most is a reasonable compromise in a cooperative society like ours.

So here’s my problem: companies like Apple and Google (two companies whose products I use, by the way) make huge profits and pay very little tax, but those who can least afford it seem to always have to pay more. My son delivers papers and makes about $2000 per year. He has just been presented with a tax bill of hundreds because his employer didn’t correctly calculate the tax after recent changes. And my daughter pays more tax because she does two badly paid jobs instead of one.

This is the sort of thing which does give tax a bad name. Of course, with a government like ours this type of policy shouldn’t be a surprise. They are intent on not only pushing wages and conditions down but making matters even worse for the poor by introducing higher taxes on them (despite their election promises). I’m afraid I can only label such policies as evil.

So that’s my first objection. My second is how taxes are spent. I’m sorry but I object to giving out tens of millions of dollars in corporate handouts to foreign companies while making life for citizens of our own country even more difficult.

And I don’t really want to have to pay taxes so that unemployed people can be given enough to survive but because of the incompetence of the government which most of my fellow citizens (but not myself, of course) voted for we have high unemployment, so I think we owe it to the less fortunate to help them. Sure, I would be happier if they had a job and I didn’t need to support them. But where are these jobs? They just don’t exist.

So tax itself isn’t bad, but the way tax is implemented can be, especially when it is controlled by a right-wing government like ours which uses tax as a weapon to disadvantage the poor and further increase the power and influence of the rich.

Tax is a tool and it needs to be used properly, but it rarely is.

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