A poor man labors for a whole month to have a decent income to live a decent life. His labor finally gets him fruit when he gets some money. He finds the government deducted a proportion from the money he earned through hard toil. Now he is worried. He starts thinking about spending less on his dreams, and cuts his expenditures. He abandons his children’s education, health, recreation, family get-togethers, and outdoor foods. Surprisingly, it has been revealed to him that he is to pay an indirect tax on necessities such as food, water, electricity, gas, and shelter. Finally, he is left with no money to actually spend on desired things. It leads us to question the role of the government in limiting people’s liberty – through excessive taxes – to spend their money on things they like most. For instance, in 2019, the tax to GDP ratio was 41.1% in the OECD countries. This tax is the sum of all taxes and net social contributions as a percentage of gross domestic product. According to the Tax Foundation, the United Kingdom ranks 22nd on the International Tax Competitiveness Index 2021. The tax revenue in the UK is the combination of Individual Taxes (28.9%), Corporate Taxes (7.1%), Social InsuranceTaxes (20.9%), Property Taxes (11.8%), Consumption Taxes (31.0%), and Other (0.4%). Taxes on income can create more economic harm than taxes on consumption and property. Aren’t burgeoning taxes the most lethal weapons in the hands of states to persecute economic freedom?
Fascinating as it may be, the essence of democracy and economic growth lies in the freedom of property. Real estate is not the only property; money and everything we own come under the domains of property. According to John Locke, those who cultivate the land, hunt the animals and forage the fruits have a legitimate claim to these goods. The people own these goods and services because they are the value of their labor. The government’s excessive taxation on our property, money, and labor means that the government is taking the value of our work without laboring for it.
Governments have become complex organizations, financing their expenditures through insurmountable taxes imposed on the public. Governments have become double-edged swords. They are not only imposing taxes on the public but also failing to utilize them for the socio-economic development of people. It leads to the accumulation of fiscal deficits and debt. Ultimately, the public becomes indebted, and their purchasing power, saving, investment, and consumption have weakened. Surprisingly, governments depend on begging bowls to manage exorbitant government machinery and fiscal irregularities. What is the solution for this menace? Aside from the tenets of liberal ideas, major world religions such as Islam, Christianity, and Judaism also oppose too much taxation on individuals:
Islam, for instance, differs from conventional economic ideas of taxation. Islam emphasizes the equality of every human being. Islam recognizes the role of markets in the efficient allocation of resources, and it also promotes human brotherhood, socio-economic justice, and the wellbeing of all. It opposes excessive self-interest, which is seen as leading to corruption, the disintegration of families, and self-centeredness. The Islamic Caliphs stressed that taxes would be collected with justice and leniency. Islam emphasizes wealth tax instead of income tax. The wealth tax in Islam aims to provide economic security to the poor. Through the wealth tax, the average person has more disposable income and is only liable to pay tax on whatever wealth he possesses at the end of the year.
In Christianity, excessive taxation is a menace that leads to disastrous results. The prophet Micah decried those “who strip the skin from my people, and the flesh from their bones; Who also eat the flesh of my people, flay their skin from them, break their bones, and chop them in pieces like meat for the pot, like flesh in a cauldron” (Micah 3:2-3). The prophet’s analogy refers to the effects caused by excessive taxation on the people.
In Judaism, the law is clear about obeying the law and paying taxes. One who does not pay taxes is called a common thief. He is also the one who offends the community as a whole and “robs the public.” The one caveat is that the tax needs to be “just”; it cannot be unfairly levied upon a specific race or ethnicity.
Governments are the organizations created by the people for their welfare and development. Governments are curtailing public freedom by imposing excessive taxes; they steal public money and rarely if ever, get their bang for their buck. The public does hard work, and the government steals their money. Even major religions of the world oppose the indiscriminate taxes and intervention of public authorities in people’s lives. We have achieved great successes in ensuring our liberties, ranging from freedom of religion and expression to freedom of association and assembly. Our economic choices are narrowed down with the increase in taxes. The state is infringing on our economic liberty by interfering with our freedom to earn and spend.
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