Fiscal Tyranny (I)

https://www.youtube.com/watch?v=MBfodEkNIE0

Taxes at the confiscation level

           The average overall tax burden in OECD countries is 48% (including VAT), which means that almost half the year, every employee and every employer works almost half the year to support the state, from which they naturally return benefits, which are however disproportionate to the sacrifice made by the citizen. And this personal and corporate tax burden does not include fees – which are paid benefits of the State. Does anyone know that this growing tax burden has ever been put to a vote?  Except for Switzerland and a few other places, where this issue passes through the filter of the referendum, as far as I know the big countries have been tightening the fiscal turnstile, feeling legitimated to do so by their political mandate, being in most cases the executive power the one that increases taxes, without any direct support in the will of the voting people.

            I ask the reader: Why is it that the referendum is rejected by politicians like holy water by demons? Is it not because the rulers fear the direct participation of the people in fiscal matters?  Most academic thinkers in this field argue that an excessive tax burden actually becomes a confiscation. The differences between the various experts only lie in the percentage from which one can speak of confiscation: some from 30%, others from somewhat more, depending on the state’s benefits and other factors.

Injury of the citizen’s right to subsidiary initiatives

           This level of confiscation leaves the citizen a very narrow margin of freedom so that he himself, as an active member of intermediate groups (foundations, associations, think tanks etc.), can also maintain with his money initiatives in the educational or other sector, since the state should not cover everything with its own management, which is always more expensive and, above all, cannot take into account the citizen’s desire or optimally respect his religious or cultural choices. Isn’t it unfair that, on this point, the policy of subsidizing citizens’ initiatives is usually strongly influenced by the interests of the government, which wants to control everything? Isn’t this a clear relic of the absolutist state, which we thought had been completely overcome?

          This abusive tendency is most evident in the educational sector, because the best way to have citizen-lambs, who are blindly obedient to the ‘big brother’, is through the curriculum of subjects in the primary and secondary cycle. In this sense, a strange ideology that has been imposed by the EU, is manifested in the enormous ‘pressure’ to establish sexual initiation in elementary school, for boys and girls from 9 years of age, without prior consultation of whether or not this pleases the parents, who are the only and maximum instance regarding the education of their children. Is it not very indicative in this context that the totalitarian regimes, of very sad memory, have totally monopolized the education of children through state nurseries and a school curriculum that was intended to distance the child from his or her parents in order to form a useful instrument for the political interests of the state, even teaching them to inform on their parents?

Citizens’ Right to Audit the State

           Ideally, an institution paid for by the citizens should dedicate itself to legally auditing the legitimacy of the thousands and thousands of regulations that emanate from the various divisions of the State, not only in regard to taxes. In certain constitutions, the state is prohibited from increasing the tax burden without the authorization of the sovereign, that is, the electorate. The result of this control would be that the state would have to return all those taxes and contributions that had no direct or indirect basis in the will of the people.

In Switzerland two concepts are distinguished: the ‘Steuerumgehung’ is the avoidance of taxes within the legal framework, which would be tax avoidance. Steuerhinterziehung’, on the other hand, is tax evasion that is only punishable when it is based on false tax declarations with the intention of deceiving. When such conditions are not met, which the tax authorities have to prove, only a fine can be applied, because the act is considered ‘Kavaliersdelikt’, or a gentleman’s crime. There, the tax officials are friendly and smiling, and banking secrecy is still respected, especially in favor of the Swiss.

A little bit of history

Two thousand years ago, taxes were rather charged to foreigners in the conquered regions and subject to the authority itself. In the Middle Ages the tithe was required, that is 10% of the harvest or of the cattle raising. The industrial revolution from the beginning of the 19th century led to the emergence of the companies and the capitalist entrepreneur. The mechanization of agriculture left the people of the countryside without work, who had no choice but to move to the cities and work for wages in the factories. At the same time the modern state was emerging as a legal organization of one or more nations.  Since then the State began to build public roads, bridges, railroads (already then this sector was exceptionally private, as in the USA) and to have an army of greater proportions.

The technological progress made the State assume more and more functions (health, pension fund, compulsory public education), requiring an increasing fiscal contribution from the citizen. In the 19th century there were great social injustices, which were gradually mitigated thanks also to the social encyclicals ‘Rerum Novarum’ and later, at the age of 40, the ˇQuadragesimo Anno’, in which Adenauer, the post-war German Prime Minister, was directly inspired to organize the public apparatus of social prevention, at the beginning of the 1950s. In turn, this system was a source of inspiration for many other countries.

Today, as mentioned above, the average total tax burden of OECD countries is already 48% on individual and corporate income. This burden includes direct and indirect taxes, but not taxes. Citizens have been rejecting this very high level for years, in fact protesting through the underground economy and legal and illegal tax evasion or avoidance. Corporations take advantage of all legal possibilities to avoid part of the taxes by means of company structuring strategies. A good part of the 6 million lawyers in the USA are dedicated to the so-called ˇtax shelter industry’ or tax protection industry. This opposition to taxes is strongly encouraged by corruption, waste, and relatively poor government services. I ask the reader: Isn’t a 48 percent tax in Europe confiscatory and does the state really pay us back with benefits we are entitled to?

The reality is that on top of this tax burden, the public administration does not miss any opportunity to meet with the citizen to collect: for parking the car, for using a freeway, for validating certain documents and records, for using public means of transport, for studying at state universities, for breathing etc. Could it be that a large part of the citizens have become accustomed to the fact that the slightest service from the State is paid on the spot? So, what does this 48% tax burden go towards? Could it be that it all goes towards maintaining the bureaucratic apparatus? The truth is that the State likes to charge double under regulations and ordinances, which would never have been approved in a referendum or other form of direct citizen approval. And a separate chapter is devoted to the State’s self-sufficient companies, which I deal with in a separate article.