Sunday, March 28, 2004
Marc Alexander on tax
Marc Alexander's weekly newsletter has a nice definition of what tax constitutes in a modern society. Having watched question time a bit recently - this guy actually looks like a useful and reasonably bright contributor. Sure he is a member of the "Let's take the high ground on every issue and let those that actually have to implement policy worry about the practicality party" - but I suppose everyone has the odd (but massive) error in judgment. If that god damned worm is banned from the next election and United Future disappear, I wouldn't mind seeing this guy in National colours.
The government uses taxes to provide goods and services but the imposition of taxes is not altogether in proportion to the benefits to the one who paid the taxes. Bluntly, the more you work to create wealth the more you are expected to pay for the privilege. Seen in this light it can reasonably be argued that 'tax' is really the cost, or price, that society charges the individual for being productive.
Worse...the more an individual works to produce that wealth, the more society insists that that individual pay even more taxes! Unlike a loaf of bread, a car or a holiday, the price of working has no fixed value but rises as a cost depending on how much you earn. It's like seeing the price tag of a good or a service - not in dollar terms - but as a proportion of what you contribute to our total pool of wealth!
Now...no one would suggest that there are no costs attributable to our social obligations. We do need to pay for the social goods that we all benefit from and these include looking after the effects of disadvantage.
But surely there must be a limit. We cannot go on expecting people to continue paying long after their reasonable social obligations are met. That simply kills incentive. After all, we don't apply the same logic on the rugby field. We don't engage with fewer players or handicap them just to make it a 'fair' contest; we don't stop artists from being 'too good'; yet when it comes to our 'work' we make a point of restricting our success by imposing the debilitating constraints of a progressive and uncapped tax.
