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Why do we pay taxes?

26 Comments
By Noriko Hama for BCCJ ACUMEN

Winston Churchill said, “There is no such thing as a good tax”. So why do people pay taxes? I am trying to write a book on this subject. The book was supposed to go out before Japan’s consumption tax increase kicked in this month — rising from eight to 10% on Oct 1 — but is yet to be completed. And my editor has gone strangely silent, which speaks volumes in tones more oppressive than his reminders.

I must say, I am learning a lot about what people think of taxes as I chase after my long-past deadline. Churchill also said, “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle”. But one of my foremost favorite quotes on the subject comes from science fiction grand­master Robert A. Heinlein: “Be wary of strong drink. It can make you shoot at tax collectors … and miss”.

Heinlein’s resentment of taxes is very eloquent­ly displayed. Yet, it is not quite clear what his thoughts are on the issue of why people pay taxes at all. He needs alcoholic support to stir up the courage to shoot at tax collectors. This seems to indicate that the moral obligation to pay taxes lurks somewhere in the author’s consciousness and conscience. But why?

What are taxes?

Two prominent celebrities have given us very precise views on the subject. Former U.S. President Franklin D. Roosevelt said, “Taxes are the dues that we pay for the privi­leges of membership in an organized society”. And Snoopy said: “Dear IRS, I am writing to you to cancel my subscription. Please remove my name from your mailing list”.

They both regard taxes as a membership fee. You have to make regular payments if you want to stay in the club. Your subscriptions entitle you to enjoy the services on offer to members. You can always opt out if you feel those services do not give you satisfaction.

It takes courage to speak out against two such august figures. Yet, I have to say, they are both wrong. Taxes are not payments you make to earn a place in the nation state club. They do not entitle you to enjoy special treatment. You do not pay taxes for personal gain—at least not your own personal gain. In fact, you do not pay taxes in the interest of yourself at all. You pay taxes for other people. You pay taxes so that those who cannot pay them can avail of public services just as much as taxpayers are able to.

Why pay?

If taxes are membership fees, people who cannot pay up are automatically excluded from the club. That is barbaric. People are people, and they deserve humane treatment regardless of whether they have the wherewithal to contribute to the nation’s coffers. If anything, it is the people who cannot pay taxes that need all the more to depend on public services.

We pay taxes so that people who cannot aren’t shut off from those privileges of an organized society to which Roosevelt refers. We cannot ask the IRS to take us off their mailing list just because we feel the subscription is not worth it. Our sub­scriptions exist for the benefit of other people, not ourselves. It could be that, by taking ourselves off the mailing list, we deprive people of the benefits they sorely need to live decent lives. That cannot be allowed to happen.

Paying taxes ought, in essence, to be an act of unrequited love. We pay taxes in the hope that people who cannot do so can enjoy the benefits of social welfare.

Hometown tax

To pay taxes is not to go shopping. Yet a remar­kably misconceived form of taxation has been in existence in Japan for some time, and it makes people think precisely that. It is called furusato-nozei (hometown tax system). It is a system through which people can choose which local community they designate as their “hometown”. It can be your actual birthplace. It can be some­where you have never been and know nothing about. If you donate a given amount to that self-declared hometown, the amount is deductible from your national and local tax liabilities.

Crucial to this whole setup is the idea of the henrei-hin (thank you gift). Local communities try to get people to appoint them as their hometowns by offering luscious presents. Local foods, elec­trical appliances, wines, invitations to local events, what have you. Competition is intense. Local governments post thank-you gift catalogues on their websites from which people can choose which goodies they want to be thanked with. So much money is being spent on procuring the gift material that one wonders what point there is in inviting people to make donations in the first place. This is patently ridiculous. Al Capone is on record as saying: “They can’t collect legal taxes from illegal money”. One wonders what a local community would do if a yakuza don appoints it his adopted hometown.

Custom Media publishes BCCJ ACUMEN for the British Chamber of Commerce in Japan.

© BCCJ ACUMEN

©2019 GPlusMedia Inc.

26 Comments
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Why do we pay taxes?

Why do we die?

These two questions will forever be interlinked.

2 ( +3 / -1 )

Why do the very rich pay taxes at a lower rate than working people?

2 ( +4 / -2 )

usually, the higher the income the higher they tax you...

0 ( +1 / -1 )

usually, the higher the income the higher they tax you...

Unless your name is Trump or a member of the Panama Club.

2 ( +3 / -1 )

usually, the higher the income the higher they tax you...

Unless your name is Trump or a member of the Panama Club

Unless your name is Clinton or another regular passenger on the Lolita Express.

-3 ( +1 / -4 )

taxation is theft

-2 ( +3 / -5 )

Trump in New York keeps two sets of accounts. Inflated one for investors. Deflated on e for the tax man and that his why his so nervous to release his tax returns.

1 ( +2 / -1 )

Lots of straw men in the article. I pay taxes for roads, schools, hospitals, garbage collection, defence, stuff like that. Since I am currently raising three kids I get a lot back. When I was single and unfortunately earning more, I paid a lot of tax but didn't get much back. C'est la vie.

The furusato nozei is ridiculous, but it is simply a diversion of taxes implemented as a "help the provinces" sticking plaster . It actually goes against the standard idea of paying taxes for services rendered, since the services in question are rendered to local people in an area most payees have no connection to. They simply choose that town because they want that particular gift. Furusato nouzei has nothing to do with the bigger picture of taxation in general. Furusato nouzei bad does not mean taxation bad.

2 ( +2 / -0 )

Heinlein’s resentment of taxes is very eloquent­ly displayed... He needs alcoholic support to stir up the courage to shoot at tax collectors. This seems to indicate that the moral obligation to pay taxes lurks somewhere in the author’s consciousness and conscience.

It suggests nothing of the kind. Nor do taxes have anything to do with love.

By that logic, if you love your children, it would be better not to feed to clothe them, but to give the money to your local crooked politician and his staff. They can distribute the money among themselves and to their friends in the construction business. And finally, they will throw a few pennies your child's way. With strings attached.

1 ( +1 / -0 )

Ah, the libertarians.

You meet very few poor ones.

1 ( +2 / -1 )

What a bizarre article.

Taxes are needed to build "social services" which include roads, the police, the military, the courts, as well as museums, food banks, unemployment benefits, whatever. Unless we live completely remote from others, some kinds of "social services" are necessary. (We can debate forever which ones.)

How those taxes are obtained is a quite separate subject. In the past, local lords took them from their vassals. Today, we have a range of taxes - on income, on wealth, on consumption, on just living somewhere. Of course we hate them, but following Serrano's thoughts, we also hate death and cockroaches.

I think Churchill was wrong. But his idea of "prosperity" might differ from others'.

1 ( +1 / -0 )

Every time Abe takes his usual complement of two planes somewhere it is the tax payer in Japan and the health of the environment that is at stake...

-1 ( +0 / -1 )

Does Noriko know that Churchill was pretty much in debt most of his life?

-1 ( +0 / -1 )

Why do the very rich pay taxes at a lower rate than working people?

Because we pay overall the majority of taxes as well as paying for the poor because they cant.

-2 ( +0 / -2 )

Why do the very rich pay taxes at a lower rate than working people?

Because we pay overall the majority of taxes as well as paying for the poor because they cant.

Absolutely incorrect. The rich pay taxes at a lower rate because they make money in a different manner (investments, as one example) that is taxed at a lower rate, the rich have resources to hire professionals to manipulate their tax returns and shield assets from taxation, the rich have the resources to influence legislation affecting tax rates, etc.

0 ( +0 / -0 )

Absolutely incorrect. The rich pay taxes at a lower rate because they make money in a different manner (investments, as one example) that is taxed at a lower rate, the rich have resources to hire professionals to manipulate their tax returns and shield assets from taxation, the rich have the resources to influence legislation affecting tax rates, etc

And we still pay the majority of the taxes overall, so if we all leave, the country is screwed, the burden will fall on the middle class which it already has, but Liz Warren’s tax grab will destroy the US. $53 Trillion it would cost to implement her crazy socialist ideas, so she’s done and she doesn’t realize it yet. It will never happen and she can’t even be honest about it. Even if you take all the money from the rich, the middle class would have to pay into taxes will go up and still it would be possible, millions of people lose jobs, it’s that catastrophic and even Joe Biden thinks it’s a whacked idea and on this, he’s really right.

-2 ( +0 / -2 )

Because we pay overall the majority of taxes as well as paying for the poor because they cant.

Except when you say "we" that does not include you.

You are saying the rich pay the highest of taxes but they don't overall. The majority of taxes are actually paid by the middle classes.

10% of the population own 90% of the wealth but they in turn they don't pay 90% of the taxes.

1 ( +1 / -0 )

And we still pay the majority of the taxes overall,

Zichi addressed this nicely.

so if we all leave, the country is screwed, the burden will fall on the middle class which it already has, but Liz Warren’s tax grab will destroy the US. $53 Trillion it would cost to implement her crazy socialist ideas, so she’s done and she doesn’t realize it yet. It will never happen and she can’t even be honest about it. Even if you take all the money from the rich, the middle class would have to pay into taxes will go up and still it would be possible, millions of people lose jobs, it’s that catastrophic and even Joe Biden thinks it’s a whacked idea and on this, he’s really right.

All of this is irrelevant to why the rich pay a lower tax rate. You simply cannot control your urge to disagree with those you think are liberal. This, in turn, causes you to constantly post irrelevant replies. Way, way too funny.

1 ( +1 / -0 )

Except when you say "we" that does not include you.

Yes, it does.

You are saying the rich pay the highest of taxes but they don't overall. The majority of taxes are actually paid by the middle classes.

But the amount overall at the highest tax rate because we have more money.

10% of the population own 90% of the wealth but they in turn they don't pay 90% of the taxes.

So what’s a fair a punt for liberals? 90% Lol

-2 ( +0 / -2 )

Almost a decade ago, Warren Buffett made a claim that would become famous. He said that he paid a lower tax rate than his secretary, thanks to the many loopholes and deductions that benefit the wealthy.

0 ( +0 / -0 )

So what’s a fair a punt for liberals? 90% Lol

Irrelevant.

0 ( +0 / -0 )

Almost a decade ago, Warren Buffett made a claim that would become famous. He said that he paid a lower tax rate than his secretary, thanks to the many loopholes and deductions that benefit the wealthy.

That has nothing to do with the fact that overall we pay more in taxes.

Irrelevant.

Not to people with a lot of money.

-2 ( +0 / -2 )

if we all leave, the country is screwed

I thought Americans were obliged to pay tax no matter where in the world they choose to live?

Or are you suggesting that rich Americans (including yourself?) will rush in their hordes to leave the country and divest themselves of their nationality?

Didn't you say you were a patriot?

Invalid CSRF

1 ( +1 / -0 )

Not to people with a lot of money.

Okay, but it was absolutely irrelevsntvtk the conversation.

0 ( +0 / -0 )

That has nothing to do with the fact that overall we pay more in taxes.

This is irrelevant to why the rich pay a lower tax rate.

0 ( +0 / -0 )

The problem with taxes is that they are involuntary. None of us signed a contract to pay them nor do we get a choice which ones to pay or where that money will go.

Incidentally, if you want a driveway you pay for it yourself. Lots of roads were built privately too. Sometimes a community got together to build it and sometimes tolls were collected to pay for it...privately. Taxes are not at all necessary for half of what is what is done with them.

If all government vanished tomorrow I am sure most of you would find ways to take care of most of the things you need which currently the government supposedly provides...or a private company would take over. Some goods and services, bought or self-supplied, would be of lesser quality but some would be of greater. And there would be a ton of "services" you would not miss at all.

But however well intentioned taxes may have been, today they are mostly just scams. I have come lean toward anarchism. Current government I have lived with is far more trouble than its worth.

0 ( +0 / -0 )

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