Taxes- do we need them and are they fair

The quote below is from a book for kids by yours truly (The big fat NO debates – Government).

Good governments often provide things for people to help them live better lives, like education, health services, affordable houses, roads and public transport, stuff called infrastructure (which includes those roads and also electricity and such). The government does not charge a lot for people to have these things. Sometimes (and for some people) these services are free. Pizza, unfortunately, is not free to anyone.

Good governments do not punish people for being poor. And it doesn’t blame them for their poverty.

How does the government pay for these things?

Taxes.

Yep, good governments tax people to pay for services that help ALL the people have better lives. It’s that simple really. If you live in a society where some people earn more money than others (and that is almost every society) the government should make people who earn more money pay more tax. They’ll still be well off but so will everyone else be a little better off. Everyone will be happier.

The case for fairness in taxation

The Tax Justice Network believes our tax and financial systems are our most powerful tools for creating a just society that gives equal weight to the needs of everyone. But under pressure from corporate giants and the super-rich, our governments have programmed these systems to prioritise the wealthiest over everybody else, wiring financial secrecy and tax havens into the core of our global economy. This fuels inequality, fosters corruption and undermines democracy. We work to repair these injustices by inspiring and equipping people and governments to reprogramme their tax and financial systems…

https://www.taxjustice.net/

The UK

The great ‘usherer in’ of our Industrial Revolution gets the first guernsey here. Critics of our current taxation systems argue that it was Britain and its empire that ushered in the modern period of international illicit financial flows (IFF). It is British empire interests that benefit most from IFFs.

The UK with its dependent territories is the biggest single actor, responsible for nearly a third of corporate tax abuse worldwide. Quite the qualification to be G7 chair at this crucial moment – but an opportunity for some redemption also.

https://taxjustice.net/2021/06/04/is-today-a-turning-point-against-corporate-tax-abuse/

And those benefits exist for the well-to-do domestic British propulation too. Monbiot writes in ‘Landfall’:

‘Since 1995, land values in this country have risen 412%. Land now accounts for an astonishing 51% of the UK’s net worth. Why? In large part because successive governments have used tax exemptions and other advantages to turn the ground beneath our feet into a speculative money machine. A report published this week by Tax Justice UK reveals that, through owning agricultural land, 261 rich families escaped £208m in inheritance tax in 2015-16. Because farmland is used as a tax shelter, farmers are being priced out. In 2011, farmers bought 60% of the land on the market; by 2017 this had fallen to 40%.’ [Emphasis mine][https://www.monbiot.com/2019/06/12/landfall/]

Monbiot said in 2004 that ‘…the problem is that there is almost no public pressure for a real war on tax avoidance.’

I doubt that things have changed in 17 years.

THE USA

The Guardian’s New York correspondent, Adam Gabbatt, writes that a ProPublica investigation found that the ‘Richest 25 Americans reportedly paid [a] ‘true tax rate’ of 3.4% as [their] wealth rocketed‘

‘By contrast,’ he writes, ‘the median American household paid 14% in federal taxes, ProPublica reported. The top income tax rate is 37% on incomes over $523,600 for single filers, having been reduced from 39.6% under Donald Trump.’ Furthermore, ‘the billionaires are not accused of illegal activity. But the rates expose the failures of America’s tax laws to levy increases in wealth derived from assets in the way wages – the prime source of income for most Americans – are taxed…’

It is a biased taxation system – as is the case with the UK – that is at the foundation of the problem.

Australia

Guess what, the same or similar situations, exist in Australia. And again, the taxation malady is aided and abetted by government. In November 2020, during one of the worst periods in pandemic misery, The Guardian noted:

‘Tax report reveals Chevron Australia paid no tax on $900m but $129,685 in donations to Labor, Liberal and National parties‘…

‘New data has revealed that 192 of Australia’s biggest companies paid tax of 10% or less of their profit in 2018-19, including seven that paid more in political donations than they did in tax.

Companies paying little or no tax in 2019, despite declaring a profit, range from the local arm of US fossil fuel giant Chevron, Chevron Australia Holdings, which had taxable income of $900m but zero tax payable, and Wilson Parking Australia 1992, the operator of Wilson Parking car parks in Australia, which paid no tax on a profit of $2.76m.

The corporate tax rate in Australia is 30% but deductions legitimately available to companies mean many pay less.

Tattarang Capital, a company owned by mining magnate Andrew “Twiggy” Forrest and his wife Nicola, paid tax of just under $400,000 on taxable income of $149.5m – a rate of about 0.36%.’

We need fairer taxation

The tax justice network suggests that the general public needs take back control of its taxation systems so that all can benefit. See this link for how this is to be done.

Tax Justice Network