It is taxes or ice creams

It is taxes or ice creams

Rakesh Wadhwa
The Boss magazine , July 15 - Aug 14, 2005


Ten year old Himal recently returned to Kathmandu for his summer vacation. He studies at the Woodstock school in Mussorie in India. Himal while walking down Durbar Marg asked his mother Charu, 'the boss's' corporate editor, "Mom, how much do you 'spend' on taxes?" "About 15%", said Charu wondering about the term 'spend'. "Why do you ask?" Himal replies, "Mom, I and my friends have located two shops in Mussorie, which sell 'tax-free' to us so I do not spend my pocket money on tax. Then with the money I save I buy a lollipop or an ice-cream stick". Two cheers for Himal. Some of the most profound truths come from the mouth of children. It indeed is a choice between paying tax and having ice cream or whatever else you may choose to buy with the money you save.

When adults pay tax, the amount far exceeds what they could possibly spend on ice creams, but the money does have alternate uses. Money not paid as taxes can go into building homes; buying clothes, cars, jewellery, and books; watching movies; taking vacations abroad; or in expanding businesses. Taxes lead to deprivation, and, is it therefore any surprise that no one wants to pay taxes, despite all the rhetoric from politicians about it being your patriotic duty to pay. The following are some quotes from American politicians and movie stars opposing Bush's plan to reduce taxes:-

Senator Frank Lautenberg, "I don't need a tax cut. It will not do me any more good. I can't buy more. I can't do more, and I want it distributed among the ordinary people who work every day." Former President Bill Clinton speaking at the Democratic Party Convention last July 26, "If you think it's good policy to pay for my tax cut with the social security checks of working men and women, and borrowed money from China, vote for them (Republicans). If not, John Kerry's your man." Actor Paul Newman: "I am a traitor to my class. I think that tax cuts for wealthy thugs like me are borderline criminal. I live very high off the hog."

"Why should wealthy people such as myself receive a tax cut?" Barbara Streisand wondered on her website. "I will be the first to admit that I don't need it. What we all need is a healthy government that can provide the services (such as education, health care, national and homeland security) that we all depend on." ( Ben Affleck asked at fundraiser for Bush's opponent John Kerry, "Because of Bush's tax cuts, I saved a million and a half in taxes last year. Does anyone think that's fair?"

You get the picture, here are the rich and famous expressing their guilt about not paying enough in taxes. Why not let them and others in every country including Nepal pay more if they choose to. In America, in the States of Massachusetts, Arkansas and Virginia, tax payers can pay more if they so desire. How many paid more? Not many, according to the Department of Revenue. In 2001, Massachusetts cut its top income tax rate to 5.3% but let its guilty under-taxed rich pay the old rate of 5.85%. In 2003, 1,488 paid the higher optional rate, out of a total of 3,218,572 tax payers. Yes, one person in 2,163 paid the slightly higher rate. Wow! Most had expected about one in 100 to do so.

This is what pro-tax US congressman Barney Frank a Democrat had to say, "No, I won't pay the US$ 800 extra. I don't trust the legislative leadership. I will donate the money myself."

The president of the US "National taxpayers union" commented, "American recognize as congressman Frank figured out that government doesn't spend its money wisely as is, and already takes too much of what we earn."

What really showed politicians double-speak was the revelation that John Kerry - with all his support for higher taxes and inspite of being married to one of America's richest ladies too paid the State's lower rate. In Nepal we should end VAT, make the country duty free, reduce the income tax to a flat 10% if it be not feasible to scrap it altogether, and allow those 'patriotic' souls who think they are under-taxed to pay more. The resultant boom in employment, wealth, and growth would make Nepal the world's envy, and, yes, allow Himal to have additional ice creams too.