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Monday, February 05, 2018

Taxes and the contract of Government

Taxes got me thinking about the kind of contract we have with the government. 
[Note: The following post is a thought process - neither complete nor complete in arguments]

Are we born into a government or do we grow up and contract with the government?

If we grow up to contract with a government, the contract begins when we enter into this contract - usually when we turn 18 years old. The contract is transitory and government is what I agree in the contract to be. People, who are present, come together to surrender some of their freedoms and money in return for the collective services that government shall enable these people to have. Now by implication, these collective services are best procured for the entire group and thus more or less obligatory. Like for example, security. It is easy for a group to protect itself from predators hence animals form into groups - giving up freedom to wander anywhere. In this transaction is the kernel of democracy. The freedom to roam / wander away is not denied. It is just that when you exercise your freedom to wander, you lose your security. This give and take is missing in modern democratic contracts.

A counter-view implies that we should not let an individual cancel her contract with the government. There are humane reasons behind this. If a person wants to opt out of this contract and he becomes ill and without access to some public benefit he may die. The question before the government is whether they should let him die or use the public services to prevent his death. If you think we should use public services to prevent his death then it starts sounding like "socialize the losses and privatize the gains". Then, he should not be allowed to renege on the contract in the first place. It leads us to a situation as if we are born into a government - where the government predates us. That is a bit queer. Governments i.e. countries are supposed to be perpetual entities. They can never die. So this every present, always alive and thus omnipotent (or rather more potent that any living person) government bestows upon us some benefits for which we are to return some favors. The benefits includes everything - air we breathe, water, public services, schools etc. and favors imply taxes. Now don't you want the government to give you more benefits, more sops and more things? Then you must pay more taxes! Next 50% inheritance tax.



 


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