Death and taxes. These are the only two things that are certain in our lives.
Taxation is an instrument of organised society. It exists for the service and promotion of other institutions and is the price we pay for civilisation.
In and of itself, it produces no personal or social utility. But make no mistake.
Taxation is not a passive instrument. It exerts an active force of strength that affects the social and economic life structure.
Over the years, people the world over have been taxed on various unconventional items, including slaves in Ancient Egypt, beards, beehives and souls in Russia and bachelors in England. So, we should not be surprised when the government proposes to tax the schools that have swimming pools.
The government provides public goods and services for society such as the military, education, roads and parks, police and fire departments, and health and public retirement programmes.
To pay its bills, the government needs revenue or a source of income. And that money comes mostly from taxes.
Taxes essentially shift resources from private individuals and businesses to the government.
Therefore, less revenue leads to fewer available resources that can be spent on such services and infrastructure.
Lower taxes are akin to starving the beast. And those in favour cheer. Undoubtedly, taxes can be a financial burden but simply put, taxes provide the funds that a country needs to survive.
Politicians cunningly gaslight the electorate that low taxes are the best way to get the economy going and to help families that feel the economic crunch tightening its grip on them. And this rhetoric has always proved popular with the electorate.
Begs the question. If paying taxes gives us such noble services, why is it often vilified? Why don’t we get a warm and fuzzy feeling when asked to pay taxes? Are we likely to get better value for money if we pay more taxes rather than less?
I submit that we must make two decisions. One, how much civilisation and progress do we want for our country? And two, how do we pay for it?
Let us examine this through the value proposition of high taxes in Finland.
According to research by Aalto University, 80 per cent of Finns are happy to pay their taxes, with 98 per cent believing that paying taxes is an important civic duty for maintaining Finland’s welfare state.
Finland has the highest taxes in Europe and the second highest in the world with a marginal tax rate of 56.95 per cent.
Yet it tops almost every international barometer of successful societies. Finns are well provided for by their government.
For instance, pregnant mothers can visit a maternity clinic up to 15 times at no charge, receive a free newborn baby box that includes weather-appropriate clothing, bedding, hygiene products, a parenting guide, and a sleep space; and receive a paid parental leave of 320 working days.
There are no tuition fees and meals are free starting with daycare up to university including students from EU countries and they receive a monthly stipend.
The costs of medical care are principally paid by the patient’s home municipality.
If one is unemployed, they get an unemployment benefit of EUR 37.21 per day.
Finland is globally ranked among the top three best countries to be a mother by the State of the Worlds Mothers Report, is 11th in the Human Development Index that ranks a country’s progress, is third in child well-being which measures how children’s rights are respected, third in the global gender equality, its healthcare is ranked among the best and most egalitarian globally by the global burden of disease, and 1st as the happiest nation in the United Nations Happiness Report. Is this a testament that proves it is worth paying high taxes?
I further submit that it is not a coincidence that the one interesting thing that the top ten happiest countries according to the United Nations World Happiness Report, is that they are all highly taxed.
This index defines happiness in terms of general life satisfaction which is affected by security and social cohesion.
These countries are reputed for their high standard of living and social welfare systems, factors which contribute to the creation of a favourable environment that supports the well-being of its citizens. And Finland is ranked first.
Conversely, countries with low taxation were also ranked as some of the saddest globally.
These include Afghanistan at 20 per cent taxation, Sierra Leone at 15 per cent, Kosovo at 10 per cent, Romania at 10 per cent, and Lebanon at 25 per cent.
In Kenya, the median voter works for the public sector thus drawing their income from the State, receives pension and health insurance from the government, has a child that attends a public school, receives healthcare from a public hospital, and receives protection of their private property from public security. All these services are funded by the State through our taxes.
If like Finland we desire as a people to scale up the ranks of the barometer of a successful society and receive the best from these public services, it will not come from lower taxes.
And it is not a question of whether we are masochists and want to pay more. But there is evidence that we will get more social structure and safety if we pay higher, not lower taxes.
Our collective action should therefore not be to vilify high taxation. It should remain hawk-eyed to ensure that those charged with their collection and utilisation efficiently distribute it appropriately and proportionately so that it can fund the services that will allow us as a people to prosper.
Finally, my unsolicited advice is to the tax villifiers. You trust an electrical engineer to use his scientific knowledge at his disposal in designing your electric motor to certain specifications of size, weight, speed, or horsepower.
Why won’t you extend the same courtesy of trust to tax experts who have used their scientific knowledge to determine how much the government requires to sustain us as an organized, blissful, and prosperous society?
Death, taxes, and childbirth! There's never any convenient time for any of them - Margaret Mitchell
