The vexed question of paying taxes has been with us, if you like, since biblical times. In the wonderful passage from the gospel according to Matthew for example, the Pharisees and Sadducees – usually not the best of friends – band together to trap Jesus on paying taxes. They ask him whether “Is it against our Law to pay taxes to the Roman Emperor or not “. Jesus answers that they have to pay the Emperor what belongs to the Emperor.
So we ordinary mortals, have come to accept taxes as a necessary evil and therefore have a public duty to pay. That notwithstanding, our modern day Emperor has a responsibility to spend the taxes that we already pay prudently before asking for even more from us. He must not, as seems to be the case, be engaged in plans to increase Value Added Tax (VAT) and introduce a new carbon tax, arbitrarily. If the reason for toying around with increasing VAT is to deal with rising fiscal deficits, a business case for dealing with spending cuts and reforms must first be made to us. So far we have not seen any concrete steps to cut spending except for statements of intent.
It is also plausible that the reason for talk of raising VAT would be to generate revenue to mitigate the adverse effects of coronavirus on government revenues. However, the very people that are being asked to pay more in VAT and a carbon tax have also seen their incomes obliterated since the coronavirus broke out in Wuhan, China. So the tax payers must be allowed to keep more money in their pockets to rebuild their livelihoods and only pay taxes that fund a limited government. Limited government means a government that focuses on a narrow set of services and seeks not to replace individual effort. A limited government is one that does not dole out free stuff which also discourages work in the process. It focuses largely on public safety and health and helps only those with genuine needs.
Even in the area of helping the needy, limited government recognises that other independent parties can do the same job effectively and perhaps more efficiently. It does not have to be involved directly in the provision of services but looks for the private sector to do the work. A limited government does not encroach into individual liberties by overregulation. Because its driving motto is that government is best that governs least, it does not have to pickpocket its hardworking citizens to feed its oversized and unproductive operations.
It is time for a give and take between the government and taxpayers with the former beginning to state explicitly what the latter would be getting in return for making sacrifices in the form of tax hikes . In other words, how does the government itself sacrifice? Anything outside that is akin to putting the cart before the horse.
In simple terms therefore, the task at hand, is for our government to look at its spending priorities and habits first while allowing us to rebuild our lives. Examples abound of wasteful spending by government where buildings including schools were built in the middle of nowhere and have now become white elephants.
As ordinary people set about navigating the ravages of coronavirus pandemic, they cannot afford to be overburdened with taxes in favour of “politically favoured” but expensive energy such as solar which distort markets.
The group that would bear the greatest burden of a VAT increase is the low wage earner because all of sudden he finds himself sending a large proportion of his income to the state. In the spirit of limited government which also means low taxes, the majority needs a tax free savings programme to encourage them to save for their future by building their own safety nets. High taxes on the other hand make it difficult to save but rather condemn people to a future of misery and not prosperity.
