What is the financial cost of existing in a society? Is there a limit to what that cost can or should be? Is there a point at which you have paid ‘enough’?
There are social costs that are either more or less obvious, such as a requirement to comply with laws, statutes, and regulations. There are unwritten social laws that require compliance, such as acceptable ‘levels’ and forms of interraction with others, an acknowledgement of the rule of authority and conformity to local community ‘standards of behaviour’ (with due recognition of the foresight and insight of Diogenes to the shackles such conformity imposes). Being a citizen of many communities means you are by default accepting the right of that community to send you into armed conflict to kill whoever that community feels compelled to go to war with – and even if you refuse to go to war then you are implicitly accepting the right of that community to enforce either compliance or some form of punishment or retribution, whether that be in the form of time in jail or being the recipient of a white feather or receiving the opprobrium of that community.
Financially we accept either implicitly or explicitly, the right of the State to levy income or capital gains taxes, stamp duties on transactions and consumption taxes, local government taxes and penalty taxes and fines and financial punishment for an enormous variety of outcomes from either basic existence or day-to-day living. These taxes are paid into local, state or federal money-buckets, from which government officials make payments for infrastructure, education, defence, health care, welfare, bribes for community compliance, incentives to favoured groups, token subsidies and ex-gratia payments as decided by the elected officials in a democracy. As Berger tells us, our perspective is blinded or blinkered by our ‘ways of seeing’, and we will see the collection, accumulation, distribution and waste of these funds as either appropriate, a necessary evil or simply another form of oppression depending upon that perspective.
The old cliche that “”nothing is certain except death and taxes” suggests how the broader community perceives taxes. They are a necessity that can’t be avoided. There are heated and contentious ongoing debates on the level, form and basis of collection of taxes. There is sometimes violent debate on the distribution of those taxes, and the allocation of funds to various government expenditures seen as either necessary or unnecessary. The bulk of people earn their income from wages and in most developed countries this means a regular form of income tax that is usually established in some form of progressive array – the more you earn the more you pay. There is very little room for altering that tax rate, and so compliance is high and those on wages will generally pay their mandated ‘share’ of taxes over their lifetime, whether they want to or not. Mainstream media enjoy publishing examples of weathly people failing to meet their ‘fair’ share of tax impost – something often countered by the argument that it is a citizens right (and according to Kerry Packer, an obligation!) to structure their affairs in a manner that reduces taxes as far as possible (actually embedded in legislation) and that the government receives taxes from those wealthy people in many forms regardless of how much tax they pay personally – such as company tax, transaction taxes and through taxes of employment.
Reuters has a video that comments on a pledge by up to 40 United States billionaires to donate at least 50% of their wealth to charity, either in their lifetimes or through their estate.
A cynic could suggest that it is not too hard to give away a few billion if it means you still have a few billion to play with. There is a plausible argument behind that but it doesn’t really give full credit to the voluntary nature of this giving.
What impact would it have for every person in a community to give away 50% of their wealth either through their lifetimes or through their estate?
It needs to be acknowledged that these billionaires are giving away funds AFTER meeting their taxation obligations (giving the benefit of the doubt that they actually have). Society requirements are met through taxes and so the redistribution of wealth beyond that is surely ‘above and beyond’ expectations?
Taxes in most developed countries do not meet government expenditures. This means that the bulk of developed nations are in deficit and often this is a ‘strucural deficit’ – meaning the country’s minimum costs exceed its income as a default position, rather than a temporary event. Considered in its entirety this means that the members of that society are NOT meeting their taxation obligations, and somewhere in the system the full cost of being a member of that community is not being recognised or accounted for.
Within that structurally faulted community/nation/system there will be people who accumulate greater or lesser levels of wealth but the existence of a structural deficit means that a component of that wealth is being borrowed from elsewhere, and the eventual repayment of that debt will result in the taking of funds and reduction in living standards to members of that community at some point in the future. It is an often heard tale that “after a lifetime of work, the government owes me x” or y or z or maybe the entire alphabet. In a country with a deficit over that lifetime, this statement is a clear untruth. Maybe. Or it could be, depending upon how you measure that person’s contribution and what your expectations are for meeting that contribution. This is where we begin to encounter a raft of opinions, philosophies, economic theories and academic literature that seeks to measure obligations and contributions. It is also an area where there is perhaps too much emphasis on measuring and not enough on basic reasoning… That last line will immediately be seen as an inappropriately sweeping statement, easily dismissed through any one of a series of robust arguments that easily come to mind. However, the written word will eventually become boring if there is not at least some room for argument or nit-picking, and so that sweeping unsupported line of argument is a token acknowledgement and surrender to the idea of retaining a semblance of reader interest.
That most persistent of hecklers – time – is shouting from the audience in ever louder bursts and so the balance of this note is of necessity, brief.
- Existence within a community incurs an explicit and implicit cost.
- Taxes are the mandated measure of the financial cost of that community presence.
- There are costs that a community incurs that are not measured when calculating taxes.
- These costs result in a structural deficit within that community whether measured in isolation or by relativity to other communities.
- That deficit may not be measurable.
- That deficit should be catered for in the financial process.
Charity could be seen as a defacto recognition of that deficit. A Libertarian position on this would suggest that taxes must be minimised as they are an impost on efficient allocation of resources. What is not recognised in Libertarian works is the level of structural deficit when all factors are considered. In this light, the community provides an environment in which each individual can attain their particular level of excellence depending upon their resourcefullness, natural abilities, education, knowledge and experience. Some will accumulate significant wealth. Some will endow the community with significant wealth through their thoughts, deeds or actions. The Libertarian position of encouraging the rewarding of those who provide the greater benefits is admirable and easily justified. However, it is arguable that the endowment of such benefits ceases when that individual dies.
What reasoning exists to justify some individuals to be born into a position where they do not need to contribute to the community in which they live? Not those who cannot contribute owing to inability or disability or circumstance but those simply don’t need to? A person who inherits the benefits accumulated by another is arguably being granted a disproportionate level of that society’s wealth for no other reason that the accident of their parentage. Such results are suggestive of the capitalist world simply being a result of the morphing of traditional aristocratic or royal forms of oppression into a model more acceptable to the modern community member.
The point of this post? As detested as such taxes have always proven to be, there is room for greater thought and discussion on the application of taxes for the efficient allocation and redistribution of wealth following death.