Author: djunehor

Many of us were born and grew up in a world that includes income tax. So, it’s hard for us to imagine a world without one. But the reality is, income taxes weren’t always a thing. At least not in the way it is now.

 

I strongly believe that societies can run without income tax. It is a valid question to ask how will government function without taxes. But how will we know if we never try? Asides the fact that very few societies still function today without income tax.

 

 

GOVERNMENT FUNDING

A government that cannot function without income taxes probably shouldn’t exist. Because it’s clearly too expensive for the territory.

 

The government is put in charge of the territory’s resources. They’re responsible for money made by the territory from trading with other territories. For example, custom duties or sale of weapons. Most territories have 1 or more natural resources that they extract and sell within and outside the territory. Of which the government is usually primarily responsible.

 

Most government institutions also generate revenue. Not necessarily profit, but revenue regardless.

 

Now, if a government is unable to function despite all these multiple source of income, they’re clearly doing something wrong.

 

 

SOCIAL SECURITY & INFRASTRUCTURE

One question that’ll typically pop up in one’s mind when you consider how the government can function without income tax is how will they cover social security – unemployment benefit, pension, etc.

 

But it’s simple, there’s already insurance for that. Of which citizens and residents are made to mandatorily pay into. The funds from inform tax is not what pays for unemployment benefit. There’s a separate deduction that covers that in form of insurance.

 

What about roads? Pipe borne water? Electricity? The above still applies. The government is supposed to be generating enough money to be able to provide these for its people and the people pay for using it. Hence the reason governments take loans. But why take loans, take mutlipe taxes, but still unable to provide all of these things reliably to your people?

 

 

MULTIPLE LAYER OF TAX

One of the fundamental problems with income tax is that it’s essentially double taxation. For every amount you make, legally or illegally, you’re already paying multiple taxes on it as long as you spend it.

 

At the base level, you’ll pay VAT (Value Added Tax), which is a tax that’s applied to most items you purchase. If you buy a car, there’s specific taxes. If you buy a house, theses specific taxes. So, that same income you already paid income tax on, you’ll at least pay 2 extra taxes on later. Asides the fact that the company that paid you already paid taxes too. VAT and specific tax applied to what you spend the money on.

 

 

NEED FOR INCOME TAX

Income taxes as they were introduced originally were meant to be temporal. As pointed out earlier, government already has several ways to generate money. However, sometimes, government expenditure has to exceed their income. In such time, citizens can residents can be taxed to generate money for that period. For example, if the territory is at war and needs more fund for weapons and military personnel.

 

Such measures are meant to be temporary. But what we’ve seen is that government is being structured such that it’s constantly spending way more than it makes. And whenever the government is “broke”, the first thought of politicians is to raise taxes. Not figure out a way to cut government spending. But a way to extract more from its own citizens and residents. It’s an unsustainable model.

 

If a government cannot stay functional without continually taking more and more from its people, despite being put in charge of the territory’s resources, perhaps it’s time for a rethink of the effectiveness of the government and how government should be funded.

Before you proceed, please note that these are my thoughts. I’m neither a lawyer nor a politician.

 

INCENTIVES

I do not think the idea of citizenship by birth as is practiced in the US and other American countries is ideal, at least for the modern time. It incentivizes the wrong things while being unfair to some others.

 

The idea that someone can be on a visit to your country, and the mere fact that they give birth while on the visit guarantees the child citizenship of that country doesn’t sound right. It incentivicizes what is now called birth tourism. That is, a pregnant woman will plan to visit the country (say US) close to their delivery date so that delivery can happen while they’re in the country. This way, the new born child is entitled to citizenship.

 

Or the idea that someone can find their way into your country illegally. But by virtue of giving birth while in the country, their child is therefor a citizen and that grants certain rights to the parent. It incentivizes what is now called anchor baby.

 

None of the 2 things is something a country should be enabling. Especially when same country has several millions that have lived there for decades legally, paying taxes and all, but don’t even have Permanent Residence (PR/Green card), talkless of citizenship.

 

I’d think what makes sense is to incentivize those already in the country legally, contributing continuously to the society with PR and citizenship, as is done in most parts of the world.

 

Take Germany for instance, if a child is born in Germany, whether or not they’re instantly eligible for citizenship depends on whether one or both of the parents is a German citizen or PR holder that lived in the country legally for certain number of years. They only get a permit just as their parents. Such a child is eligible for citizenship when one or both of the parent becomes a citizen too. Or after the child has lived and integrated in the country for a couple of years.

 

This arrangement makes more sense to me in the context of incentives.

 

NEED FOR CITIZENSHIP

Now, the idea of having a country’s passport or not doesn’t hold much value to a child, from my perspective. Let’s say a child is born and they get a German passport instantly, they have very little use for the passport. A child cannot vote. A child cannot travel on their own. I think the main value for the child is right to stay in the country indefinitely, which of course still somehow depends on parents. Because which parent will leave their child behind if they’re leaving the country for whatever reason?

 

 

STATELESS INDIVIDUALS

As with a lot of geopolitical issues, there’s no simple solution. Some people are stateless. They do not have the passport of any country and probably can’t easily get one. For example, if a Nigerian travels to benin republic, they do not need a passport to cross the border as fellow ECOWAS state. If they somehow find a way to smuggle themselves to Italy. At the border, they won’t have an ID to show. And do not have the ability to return back to Nigeria to get a Nigerian passport. Such a person falls under the category of stateless.

 

Hence, if they have a child, the child too will be stateless, which is not ideal.

 

The first thought will be to create exception for stateless parents. However that introduces a new loophole. People can go ahead to make themselves stateless to qualify for the exception.

 

CONCLUSION

While I do not have an easy solution/replacement for the concept of “citizenship by birth” as is practiced in many American countries, I don’t think the current structure is ideal. It’s for sure not favorable to the stakeholders as we can see from current turn of events.

I intend to use this space to document my thought on random things, ideas, events and what not. Topics will range from religion, history, sociology, politics, geopolitics and science.

 

I hope to publish something at least every few days. As long as life allows me to.

 

And if there’s a topic you’ll love me to talk about, feel free to shoot me a message.