Sunday, March 12, 2006

Tragedy of the Taxes

13 tax proposals now sit on Treasurer Velega Savali’s desk. The fact that the Tax Office and the Treasurer communicated with each other on these “alternatives” is enough fodder for a horror story. We have the tax collector and the spending arm of government together in the same bed. Scary indeed.

This may be frightening, but it is no surprise. The government, like any institution, must bring in revenues to pay for the services it provides. The real scary part, however, is the true nature in which government generates that revenue.

Unlike activity in the private sector, taxation is ultimately enforced at gunpoint. If you don’t pay taxes, you get a fine. Don’t pay the fine, a policeman will show up to your house. If you resist arrest and the violence spirals out of control, the officer can shoot you. Not paying taxes can ultimately mean the death penalty.

Being forced to pay the government takes an essential power right out of your hands. You don’t get to decide what your money gets spent on because the elites in government do that for you. Thus, you cannot punish poor customer service in a government department because they’re going to end up with your dollar at the end of the day anyway. You definitely cannot refuse to fund a 100% increase in Fono allowances either.

To keep your eye off the ball, politicians rely on emotional arguments. Emotional arguments need no reason, facts or rationalization. They only need to find a tragedy, isolate it from reality, pound their feet, cry their tears and then, arrive at your door with the police officer to hand you the bill.

Manu’a, for example, holds a special place in the hearts of many in our great territory, but we cannot have it both ways in that part of our country. Manu’a cannot fend off development (and its side effects: pollution, population increase, immigration of cheap labor, etc.) for fear of losing our culture, customs and traditions or harming the environment, and then expect to have all the conveniences of a modern economy. Mail, medical care, air travel, ocean transportation and food are not products of government but the market. Therefore, Manu’atele must voluntarily move forward in creating one.

13 tax alternatives (16 if you count the hotel, car rental and bottle taxes) on the government’s agenda will tax those people and assets that do the producing in our society. Yet, we have all this land that sits idly by while our producers pay for the police and courts that protect all of our lands. Mr. Goldwaithe is right that property taxes will force everyone to share the burden of government equally. The more land the police has to protect, the more you should pay as far as their expenses are concerned.

Yet, property taxes still robs you of the power over your own money. Police service is still mediocre despite all the money we pay in taxes now. Moreover, handing over property taxes to the government doesn’t guarantee that your money will go into protecting your property. More than likely, it’ll go to public schools even if all of your children are in college off island. More than likely, it’ll go to reducing LBJ fees even if you are healthy and in no need of medical services. More than likely, it’ll go to paying for a 100% increase in Fono allowances, government pay raises, Sega’ula, MV Sili, KVZK-TV and more.

So taxation allows for a disconnect between the consumer and the provider. When there is a disconnect, some end up bearing most of the burden than others do. When there is a disconnect, our money goes to things we don’t benefit from like a 100% increase in Fono allowances. Because of this disconnect, there is harmful unfairness in the tax code, and fraud, waste and abuse in the ASG.

To counter, politicians will argue that we need taxation to pool our money together. However, there are market mechanisms that address those concerns. They’re call insurance plans. Insurance plans can be tailored to consumer needs, and we can keep insurers accountable through open competition, contracts and the courts.

Another flaw of taxation is that even for-profit companies will try to use the system to their own advantage. This is called fascism. Companies like Vaipuna and Island Choice want to use the power of government to raise the prices of our bottled water (through the bottle tax) while keeping all of their profits for themselves. They make us suffer for their continued success, and that is wrong.

User fees will allow us to pay for what we receive. User fees will give us the power to keep government accountable and transparent because we will have the oversight and hold the strings over our own money. Thus, user fees will protect us from the government and special/corporate interest. Still, the ASG should enact a small flat tax to guarantee our police and court services committed to our individual rights to life, liberty and property. When and where we need more than that vital necessity, we need the freedom to use our money as we see fit.


At 8:40 PM , Blogger Stuart K. Hayashi said...

Many "Social Contract" theorists disagree with the point that taxation is ultimately coercive.

In the 1600s, political philosopher Thomas Hobbes said that anarchy is tyranny because it leaves everyone free to pillage, rape, and murder everyone else. And so people came together and finally decided there needs to a government with a monopoly on the legal use of physical force. All this power was delegated to a central authority who became the chieftain. By Hobbes's time, that chieftain became the monarch.

In Hobbes's view, the monarchy keeps the civilians in check by policing them. And the civilians keep the monarch in check because, if he becomes too despotic, then the citizenry will have a moral right to violently overthrow him.

Hobbes said that, by living in Society, you implicitly sign a contract-by-estoppel whereby you contractually assent to paying the user-fee for government that is taxation.

Ergo, according to Hobbes, the government is not initiating spoliation upon you by using force upon you if you refuse to pay taxes. If you evade taxes, say the Social Contract theorists, then it is you who have initiated spoliation upon the rest of Society (protected by government) because you have initiated a breach in the Social Contract -- you have taken government protective services without paying for it.

While Hobbes gave an apologia for the monarchy of his day, our times' Social Contract theorists uphold the moral supremacy of modern American ochlocracy--er; I mean "democracy." Today's Social Contract theorists intimate that, because the majority of people voted for a certain body of government, everybody in that Society consents to all of the taxes and regulations that body imposes.

The Social Contractarians say that the minority (or majority) of people whom did not vote -- or who voted for the losing candidates -- are still bound by the Social Contract, for the mere act of living in Society makes them implicit signers of the Social Contract. If you don't like a certain country's government, say the Social Contractarians, then move to some other country. They also insist that if elected officials have truly breached the Social Contract, then the electorate can punish these officials by voting them out of office.

Do you have a reply to that?

Also, many political commentators would object to your use of the term "fascism" to describe kleptocratic government operations, as the word "fascism" is often associated with Nazis. These political commentators would yelp that your calling this practice "fascism" implies that you are unfairly comparing the politicians of this American territory to Nazis, mass murder, and censorship.

Do you stand by the manner in which you have employed the term "fascism" in this letter to Samoa News?

Keep up the good work, my friend! :-)

At 2:37 PM , Blogger Talifaitasi Satele said...

a contract is only binding where each party intentionally (or gave the impression of intent)gave consent to an agreement. so people can contract and be bound to the organization's rules like homeowner associations. thus, contracts involves individuals. when it involves organizations, those organizations' contracts with its members need to state where and how their members agreed to those organizations binding them in such agreements.

government doesn't prove such agreement was given by every member it claims as its subject. if individuals want to be members of the government institution they can go and sign a contract to do so. every individual has the right over his or her own life and is therefore the only person who can give permission to who they do or do not want to associate with.

but government doesn't need permission to protect individual's rights to life, liberty and property from other individuals, itself and foreign invaders.

government is just a service provider of protection.


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