A most taxing experience

Most of the time, people forget the reason why something exists in the first place. If something has been around for sometime, persistence itself apparently becomes a sufficient justification for perpetuating it. When something appears not only to have persisted over time but to have attended all societies — to have become universalized — then hardly anyone gets to be interested in why and how it came about.

So it is with taxes and taxation. Since ancient times, societies have collected taxes in one form or another. When a wit observes that only two things — taxes and death – are certain in life, he acknowledges their inevitability and universal character. (By the way, some people are inclined to think that taxation at times is no more than protracted death. To them, authorities exacting onerous taxes are sadists employing a thousand and one cut on their hapless victims, each cut bringing the latter that much closer to merciful death.)

In a democratic or democratizing society, taxation is premised on the idea that government needs resources to discharge the responsibilities of governance. Funds have to be generated and/or collected so societal functions that individuals and groups are unable or unwilling to undertake may be assumed by government and its various agencies. There is a popular assumption — explicitly acknowledged in many constitutional and legal provisions – that government exercises these vital functions as a matter of public service.

Governments collect taxes in order that they might maintain peace and order, promote public education, ensure national economic viability, facilitate commerce, transport and communication, administer justice and, most generally speaking, protect and enhance the nation’s quality of life. Devoid of these responsibilities, governments cannot easily justify exacting taxes from the citizenry.

In collecting taxes, democratic governments are also guided by a principle that progressively distributes the burdens of governance. Those who are materially better-off are to be taxed more than those with less resources in life. A similarly socialized context is supposed to govern the distribution of benefits accruing from taxes, such as access to public education, public transportation, welfare programs and other allied government services.

Thus taxation’s orienting ideas — one would daresay, taxation’s ultimate raison d’etre — may be summed up as effective public service, socialized burden-sharing and a parallel socialized system of benefit-sharing.

Where these ideas continue to demonstrably guide a nation’s taxation system, the authorities must be acclaimed for having kept faith with their democratic commitments. They must be congratulated for having persuaded or forced their national constituencies to honestly and responsibly pay taxes to the government. In such a setting, the efficient and judicious use of taxes for truly public ends will quickly manifest itself in improvements across all areas of social and economic concerns. People will experience greater public safety, find more gainful employment, lead healthier lives and have better education. Public hopefulness will predictably increase, fewer would be tempted to seek employment abroad and overall trust and confidence in public officials would rebound and reach record highs.

In such a situation, an appeal by national administrations for more – even much higher – taxes may be rewarded with much public support and followed by widespread compliance. After all, demonstrably good performance inspires public confidence and truly virtuous circles in public administration can work wonders towards increasing tax-consciousness and civic spiritedness among the citizenry.

On the other hand, where government authorities seek more and new taxes but are unable to show good results from using public funds, one must expect much public resistance to paying even the present taxes and naturally even more unwillingness to absorb new or higher taxes.

Record-breaking public debts, sustained and arguably worsening budgetary deficits, corruption-tainted infrastructure and energy projects, highly visible, bloated bureaucracies and grossly deteriorated public facilities — these cannot possibly inspire an already hard-up citizenry to yield more of the little resources they currently have and channel them as additional taxes to a cash-strapped, apparently non-performing administration.

An administration that regularly neglects the public interest inflicts a most taxing experience in governance on most of the nation. It is not reasonable to expect that Filipinos would still dutifully pay whatever this administration now seeks to impose as new and higher taxes. Such an expectation assumes that there is no end to taxing the patience of a historically docile and mostly unempowered citizenry.

The Arroyo administration’s public finance gurus could be in for a horrible surprise. They might be conjuring a crisis that would make the Angelo Cruz hostage situation look like a kiddie party.

Taxing Filipinos even more nowadays is a most dangerous proposition. It would be far better for the Arroyo administration to concentrate on making big-time, habitual tax evaders pay their long-delayed tax obligations. It would also be r more prudent for the present authorities to avoid tax amnesty programs that penalize conscientious taxpayers even as they systematically reward calculating tax cheats.

Taxing experiences do not induce people to pay more taxes.