Monday, August 27, 2012

Taxes and Corruption

Thetax, Where to go?

The biggest advantage to understand the principles of ethics and consequently Policy can be derived from human nature through Reason's going to have a clear and unambiguous what is right and what is wrong in society.

 If man is a being independent and of Reason, these principles apply. This knowledge is the best defense you can have against the enemies of individual liberty, because the weapon they most use is to affirm that freedom does not work.

Seeing the reality of taxes, probably the reaction of Brazil is doubtl that a government that did not "work". Can not imagine a government that is truly valuable to the productive citizen means you can not imagine a government that citizen is willing to voluntarily support.

But not imagine the scenario that brings the certainty that a government can operate without charging tax, is to understand human nature and deductive and inductive chain that leads up to this fact individual rights. We know that freedom "works" because it is consistent with the nature of man, it is certain that man is free. And we know that taxes "do not work" because they contradict this nature, violate their rights.

Lovers of "state benefactor", people who see the government as a means to solve the difficulties of life and not just as a defender of rights, resist the idea that tax does not work as much as the idea that the voluntary funding of government can work .

Just as helpful as one might illustrate defray the government of a country really free, it exemplify how taxes affect the lives of all of us who are undergoing government "benefactors." The difference is that in the latter case there is no need to use imagination, examples are everywhere and in full view.

The various ways in which taxes "do not work", corruption is one of the most visible and revolting. It is relatively simple to understand how taxes enable persistent and widespread corruption in a country.

To understand this mechanism, just a simple illustration. Imagine the owner of the bakery where you buy bread. He buys flour, yeast, water and electricity, pays its employees to make bread and sell bread every morning. Your customers only buy bread in his bakery if he offer for a reasonable price, and with decent quality. Otherwise buy bread anywhere else, do at home, or even replace the bread with something else in your morning coffee.

Imagine for a moment what would happen if they passed a law requiring the owner of the bakery to deliver a daily bread per person throughout their neighborhood, and granting the right to move from house to house to collect a monthly amount that he thought right for the services - armed with a rifle.

This introduces possibilities that did not exist before. The baker can, for example, buy the same meal that always wears paying double the price to the supplier. The supplier, grateful, gives a portion of the difference for Baker - "out." At the time of passing the houses, Baker states that had increased costs (even has the receipt to prove flour).

The baker can also hire their friends and relatives to work in the bakery, instead of hiring the most qualified people. Can pay their contracted salaries much higher than the value of the work they actually do. At the end of the month, once again, he has evidence that increased costs. The "fair" price for roll each day rose again.

Over time, vendors can deliver high quality raw material getting worse, increasing your profit and "box" that pay the owner of the bakery. The baker does not care, its "customers" have no other source of bread or can refuse to pay for it for more than bread to stay bad. At the end of the month, it is he who has the gun.

Without being able to charge their customers by force, the baker only loses by increasing their costs, hire people for being unproductive friends or relatives, or worsen the quality of your product. Can take the value that the customer wants threatening them with a rifle, you can do all this. Of course the "new law of the loaves" does not guarantee that there will be corruption, but creates ample opportunities for her.

Imagine the same scenario that we set up for a simple neighborhood bakery repeated on a national scale. This is a government based on taxes. The constitution of 1988 requires the government to give citizens all sorts of "bread" of schools to hospitals, highways to the movies. The constitution also gives the government the right to take a value of citizen "fair" pay for all this - by force.

If the Brazilian citizen had the option of not paying the government consider bad, it would be impossible to sustain this inefficiency and dishonesty. The government would have to convince people that the productive services it provides really worth something. Policymakers would need to gain and maintain the trust of these people in their honesty.

Are the taxes that make viable the corruption and thievery on the scale we see today in Brazil. Worse, the opportunities for corruption created by the government to attract taxes exactly the kind of person who intends to take advantage of them! If something is dirty politics today, is because the current political system establishes and encourages the dirt - and taxes are a major cause of this situation.

In the long term, opportunities for corruption corrupt attract, attract thieves steal opportunities. To keep a country free of corruption, we must eliminate opportunities. To keep a country free of corruption, we need to keep its citizens free of taxes.

Source: O Capitalista

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