Sections

Services

Information

UK United Kingdom

5 reasons why ‘tax’ is not a dirty word

There are many things in life which conjure unhappy thoughts but in reality, are not so bad. Things that might make us shudder to think about, but actually get a worse wrap that they deserve. Vaccinations, for example - a moment’s pain for a lifetime of protection. Or high school maths exams, which might seem like a pain at the time but come in very handy when you’re trying to work out the temperature on a visit to the USA.

Flickr / tolworthy
I would argue that ‘tax’ is a third example.

Having just lived for three years in Denmark, renowned for their near-50% income tax, I think we have it all wrong when it comes to how we perceive taxation and paying tax.

Here are 5 reasons why I would argue ‘tax’ is a not dirty word.

1. Tax can be very healthy

Although the thought of paying tax might make us feel ill, taxation is actually very healthy. At a population-level, tax has been essential in the control and reduction of disease from tobacco, for example. In short, we know that the more we tax tobacco, the less people will smoke (and less smoking means less disease). In addition, thanks to the visionary work of VicHealth leading the charge in the last decades we can double this health payout by using the extra revenue for health promotion (e.g. Quit)!

In fact just this last week Mexico, a nation struggling with some of the highest rates of obesity and chronic disease in the world, announced a range of new tax measures to tackle unhealthy food. Including 8-10% taxes on soft-drink (soda) and junk foods, the hope is to reduce consumption but also rein back some of the social costs of their obesity epidemic.

2. The whole is greater than the sum of the parts

We don’t each need a road, or a hospital, or a school - but collectively we need all three and more. It might sometimes seem like a small cut in taxes is a win for all, but when you consider there are more than 11.5 million tax-payers in Australia alone - suddenly a few dollars means a lot!

Flickr / James Cridland
A ‘fiver’ from each of us, for example, could fund the national Royal Flying Doctors Service for an entire year, and $100 from each tax-payer could fund a new major cancer research hospital for one of our state capitals.

More than this though, there is good evidence that public, collectively funded healthcare systems are more efficient than those that are privately funded - in other words, we save money by putting our contributions into one big basket from which we then provide healthcare to all.

3. Paying tax doesn’t have to make us miserable

The thought of a tax return is enough to make anyone’s smile turn upside-down - but actually some of the happiest nations in the world pay the highest tax rates.

Danes, for example, are among the happiest (if not the happiest) people on earth and yet, pay almost 50% in personal tax - and the concept of a tax deduction is also non-existent. Some would argue that this is because they get free, universal healthcare and education in return, as well as a year of maternity or paternity leave. Maybe it is just the warm and fuzzy feeling they get paying money into a collective pot. Either way, it doesn’t seem to be getting them down.

Flickr / soukup

4. It’s how we pay for health and education

The government doesn’t (usually) just print money to make the services and infrastructure we all use on a daily basis - and the tax we pay doesn’t disappear into a big, black hole (although it may sometimes feel like it). The tax we pay is exactly what the government (who we elect) have to invest in the hospitals, roads, railways, schools and parks that we all need and want. This is the most important concept to keep in mind when we all call for tax reductions and look for ways to minimise the amount we pay.

Less tax just means we have less to use on the nation’s needs, and less to invest in the community’s future.

5. Taxation is democratic. Don’t be annoyed by tax - just demand to know where it’s going

Finally, don’t be against tax - be against waste.

Don’t elect government that will simply collect less tax (or at least, don’t continue doing so) because eventually we will have too little to fund our essentials. Exercise your democratic powers not to reduce tax, but to maximise the outcomes and ensure that the tax that is collected is used in the way you want it to be used.

Tax is not bad - waste is bad.

Flickr / Images_of_Money

A taxing thought.

Taxation is the road you drive on, the medication your grandfather is taking, the TAFE course your cousin enjoys and the doctor you take your child to.

‘Tax’ is not a dirty word - and should be celebrated as a marker of democracy, not avoided as a collective hindrance. If manageable and progressive, it can do great things.

Not a taxing, but important, notion.

-

flickr / rich
Connect with Sandro on Twitter via @SandroDemaio.

Join the conversation

24 Comments sorted by

  1. Paul Felix

    Builder

    Yes yes and yes.
    My observation is that people are very selective about tax depending on what it pays for. So tax is fine in the farming community if it pays agricultural subsidies. M Newman thinks tax funding of corporate welfare is good but to protect the environment is bad. Many charities say that tax to pay for welfare, housing, health etc is good but middle class welfare is bad.
    Sadly we are a community that, if you liken tax spending to buying a car, we want to buy a Rolls Royce but only want to spend enough to buy a clapped out clunker.
    We say we support paying more tax if it is spent well but will never vote for a party that advocates an increase in taxation, regardless of how it is spent.
    Tax is good.

    report
  2. James Jenkin

    EFL Teacher Trainer

    'Tax can be very healthy'

    Taxes on a behaviour send a strange message that what you're doing is fine, but we're going to penalise you for it at the same time.

    Imagine that at school - 'You're free to fight other kids. And you'll be punished'.

    It's perverse.

    report
    1. Mike Hansen

      Mr.

      In reply to Mark Chambers

      And also bizarre.

      How many people get the message that speeding is OK because of speeding fines.

      I think he keeps the straw under that hat he is wearing.

      report
    2. James Jenkin

      EFL Teacher Trainer

      In reply to Mike Hansen

      Mike, the analogy doesn't work. Speeding is illegal.

      Sin taxes are more like saying 'go ahead and speed - but we'll impose a surcharge'.

      If we decide something is harmful enough, bite the bullet and prohibit it.

      report
    3. Henry Verberne

      Former IT Professional

      In reply to James Jenkin

      Does that imply you are anti tax on alcohol James ? My view is that it is simplistic to simply prohibit a legal substance but you can impose a cost on use which arguably deters consumption to an extent.

      report
    4. James Jenkin

      EFL Teacher Trainer

      In reply to Henry Verberne

      Hi Henry

      Good question! I'd oppose any tax used to discourage people from a behaviour. If it's legal, then it's up to us.

      If people argue that government should guide our behaviour, it should at least be consistent. These types of taxes only try to influence a small random selection of behaviours - things we can buy. The authorities don't try to influence the relationships we have, how often we read, or how close we sit to people with a cold.

      Now I'd assert of course they shouldn't tell us how to do these things - but neither should they tell us what to consume.

      report
    5. Mark Chambers

      logged in via Facebook

      In reply to James Jenkin

      James,

      There are a number of problems with your world view.

      Firstly, having a legal/illegal split on behaviours is just plain simplistic. Murder is illegal and is punished by a spectrum of penalties. Speeding is illegal but is punished with a different set. Smoking not illegal (yet) and is controlled by various prohibitions and punished by tax.

      And some things that were illegal are now accepted - homosexuality, prostitution, reading Slaughterhouse 5 or Lady Chatterly's Lover.

      Secondly…

      Read more
  3. Suzy Gneist

    Multiple: self-employed, employed, student, mother, volunteer, Free-flyer

    Have to agree with you. Having lived and worked in several European countries, the main difference in attitude to Australia is how much trust the population has in the transparency and effectiveness of its government. If there is an ethic of good management and equality - as in most Scandinavian countries - this system works well for most.
    I'm not sure Australians regard their governments that favourably on these trust issues - possibly because equality and transparency are not seen as desirable goals overall yet.

    report
    1. Michael Hay

      retired

      In reply to Suzy Gneist

      You are right, Suzy. The shallowness of Australians in that they are selfish and distrusting makes creating a stable, revered form of government a pipe-dream.
      I think that the problem gets back to education, where the teachings of ethics and social co-operation should be placed on the same par as sport and where our TV stations should be required to assess to preponderance of USA sitcoms and violence and the effect that these are having on our way of life.
      It is said that we get the government we deserve - but I don't deserve the lack of standards set by our current politicians. It's the majority who dictate that; and they never put their thoughts into The Conversation !

      report
    2. Neville Mattick

      Grazier: ALP Member at A 4th Generation Grazing Station

      In reply to Suzy Gneist

      Can I put it to you that "the trust the population has" is severely diluted by recent events.

      Case in point the twenty two million Dollar advertising campaign paid to the MSM attacking the leadership of PM Kevin Rudd.

      This was deliberate to damage the office of PM and Labor to save mining billions so everyday voters' then criticise the Political process and the party in power (always Labor by the way) for ineptitude and resent Tax accordingly.

      The irony in this case (which should not be forgotten - the dismissal that is) that the revenue from the RSPT would have eased income tax for some and comfortably built the NBN and NDIS, alas alack now it is going to be the responsibility of smokers' and many low income earners to do same.

      Oh and great article Allesandro!

      report
    3. Andy Cameron

      Care giver

      In reply to Suzy Gneist

      Suzy, Australians are richer, and enjoy a higher level of development, than your European pits of unemployment and racism.

      report
    4. Suzy Gneist

      Multiple: self-employed, employed, student, mother, volunteer, Free-flyer

      In reply to Andy Cameron

      Yes, they are richer, at least on average, so they can afford to fund better services. Unfortunately they are also on average still pretty racist - not sure which 'pits' you talk about, but i could point to a few hotspots of unemployment and racism in this 'developed' country...

      report
  4. John Phillip
    John Phillip is a Friend of The Conversation.

    Grumpy Old Man

    Loved point 5, Alessandro. Most accept paying tax as part of their role in the community. They get fed up when they perceive that their tax dollars are being wasted either through straightforward abuse or through the funding of programs that fail to deliver.

    report
    1. David Arthur

      resistance gnome

      In reply to John Phillip

      "... funding of programs that fail to deliver ..."?

      That may a little harsh - by all accounts both Peter Slipper and Sophie Mirabella are each now happily married, so attendances at their respective nuptials on behalf of us all by selected luminaries were well worthy of taxpayer funds.

      report
    2. Darren Kay

      Private trader

      In reply to David Arthur

      Regrettably, video footage of George Brandis at shockjock weddings hasn't been made public so it's hard to judge how well Fancy Feet George spent our tax dollars on the dance floor.

      report
  5. Christopher Seymour

    Business owner

    I think most people appreciate the benefits of taxes - from defending us from enemies to educating our children. Even the childless benefit from money spent on education because those children are the ones who will be operating the economy and providing goods and services when the childless retire.

    However what turns people off taxation is waste and corruption. The appalling waste of money and lack of control on the school buildings and pink batts programs, the corruption in NSW mining leases and the current row over over MPS expenses are some examples here. The widespread tax evasion in Greece is another example.
    Governments should not forget that it is the people's money they are spending.
    Its relevant too that the example cited is Denmark, a small country in size and population. Money is best raised and spent at the local level. In Australia, GST levels should be set by the states and local councils should be given more control on spending on schools and police.

    report
  6. Stephen H

    In a contemplative fashion...

    Governments hate to raise taxes, but love to cut them. Unfortunately, there is no magic pudding, and the more people there are the more government services they demand. Throw that in with the fairy-tale promises our politicians throw around, and it turns out that our governments spend more than they raise.

    Australians (and I do include myself in that group) can afford higher taxes more than they can afford endless cuts to services that help the most disadvantaged in the community. Why do we have beggars on our streets, when we are such a rich country? Could it be that we are rich but uncaring, selfish about "what is mine", and disdainful of what our governments have actually provided to get us where we are?

    Fairness and egalitarianism are not communism, and are reasonable to expect from reasonable people. Australia seems to have forgotten in some key areas (if it ever knew) how to help others.

    report
  7. Michael Croft

    logged in via LinkedIn

    "Finally, don’t be against tax - be against waste." . . . "Tax is not bad - waste is bad."

    Waste is not bad either, it is absolutely essential in any system. The term 'waste' is subjective (just like the term 'bad') and context dependent. Waste is also; built in redundancy, a surplus, a buffer, a reserve, system slack, system resilience, response capacity, and so on - you get the drift.

    report
  8. John Armour

    logged in via email @bigpond.com

    Whilst I'm totally on board with your advocacy for the public good I must tell you that there is a school of economics (Modern Monetary Theory) that says taxes fund nothing.

    And when one understands that the government is the monopoly issuer of the currency this becomes self-evident. Surely, this cannot be controversial.

    The commonly held belief however that the government operates under some kind of spending constraint, like a household, does not make sense.

    There is no logical reason…

    Read more
  9. Andreas Jacques

    Manager

    Agree on all the straw man comments. I think columnists should be allowed the option not to submit if they don't have any copy for a deadline.

    report
  10. Bob Fawcett

    Teacher

    Alessandro, the only part of your article I can disagree with is the use of "reign back" rather than "rein back".

    report