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What Would The World Look Like If The Rich Actually Paid Taxes?

By Krishangi Singh:

Ali, a daily paid worker, struggles each day to send his son to school. His country provides one of the best public school services, and yet, he is unable to send his son there without worrying about the high amount of user-fees. Despite having the best public services around him, he finds it out of reach.

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Rafael, belonging to the same economic section as Ali, sends his son to the nearby government school. His country provides education that is nearly cost-free thus allowing larger public access. However, the quality of education, even after implementing numerous education schemes, is extremely poor. Rafael’s son may go to school, but education remains out of bounds.

In both cases, we observed a lack of easy access to essential government services. While Ali’s country suffers from a lack of appropriate public funding due to regressive taxation, Rafael’s country suffers from lack of transparency in usage of public funds.

When we discuss progressive taxation, most people immediately think ‘Why should I have to pay more money for somebody else’s benefit?’ Progressive taxation does not imply that out-of-the-blue, a huge amount will be deducted from your salary account to give somebody else extra privileges. A small deduction from an average earner’s account on a large scale can easily assure more funding for cheaper basic public services, which each citizen of the country is entitled to. In simple words, one less Starbucks coffee a month can mean free education to Ali’s son and many more.

In a research by Oxfam International, it has been found that the 85 richest individuals in the world have as much wealth as the poorest half of the global population, is set to rise to 90 per cent by 2015. In fact, lowering the income share of the richest 20 per cent by just one percentage point could save the lives of 90,000 infants each year.

A research from the Brookings Institute has found that 154 million people could be lifted out of poverty by 2025 if the richest 10 per cent give up just 0.25 per cent of their income.

Thus, we can easily see that a little contribution from the privileged section of the society can drastically change the living conditions. The idea of progressive taxation is that without taking a lot away from you, it gives generously to the needy.

Rafael’s case, on the other hand, does not result from regressive taxation. His country has the required tax in ratio to the national GDP, which allows the country’s government to implement education, health and other public service policies.

However, the fruits of these policies never reach the common masses. Scamming of public funds, tax evasion, locking away money in tax havens- all lead to scarcity in funds that result in poor quality public services. (Remember CWG scam?) In a simplified manner, Rafael’s fellow citizens sacrifice their cup of Starbucks coffee but that money, instead of reaching public funds, is gulped down by various authorities.

Such lack of transparency in tax funds ends up troubling the country’s progress in two major ways. Primarily, it ends up creating more inequality than the ‘inequality-busting’ policy sought to tackle. Secondly, the policies introduced fills up the blanks of lacking public services on paper but it does not bring any substantial effect in actually tackling equality.

What we are then left with, is hospitals without beds, schools without blackboards and promises without fulfilment.

While we generally assume that the biggest tax problem in our lives is ‘giving so much tax’, we hardly give a thought to the fact that our duty as taxpayers doesn’t end at a mere monthly deduction from our salary accounts. The privileges we have been given come with a responsibility to ensure that we inch towards the goal of equality.

At the end of the day, our belonging to the better half of the society holds no essence if we do not pave the way for the other half to join in.

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