[FOUNTAIN]Plunder and taxesWhen wandering bandits plunder a village, they loot it entirely. But the fixture bandits are different. They plunder the village but leave as much of the peoples’ productive capacity intact because they are thinking of the next round of banditry. Some bandit groups of the past gained enough power to seize an area, settle in and prevent other bandits from entering.
As a village grows richer, the income of the bandits also increases and their authority grows greater. Bandits who build up money and authority are transformed into noblemen and their leader becomes a king. Regular plundering is given a plausible name: “taxation.” Simplified, the taxes that kings and noblemen collect and the “protection money” that gangsters extort are nearly the same. That logic can also be extended to modern politics.
The change from monarchy to nation states has been called a “war of taxes.” Social classes that accumulated economic power revolted when they could not bear the plunder of kings and noblemen. That same reason triggered the American revolution. There is even a saying, “There are patriots who will risk their lives for their country, but a man who voluntarily pays taxes is hard to find.” To expand on that saying, perhaps part of the reason of taking up arms for one’s country is to prevent him from being exploited by the victor when his nation loses the war.
In a democratic society, taxes are decided by the people’s representatives. The point of contention changes to the profit of public community, and the interests of individuals and groups. It is not easy to find a point of contact that maximizes the profit of public community and minimizes the discontent of all the people. An extreme case is a “wealth tax” on the rich. In Europe, many people are said to have changed their nationality to avoid it. Many critics say that the tax is inefficient and damages the economy.
To prevent real-estate speculation, the South Korean government recently said that it would raise the property tax on high-priced apartments and would impose comprehensive real-estate taxes on large landowners. That kind of program has been attempted several times before but failed. Immediately, voices were raised against this “real-estate wealth tax.”
At their heart, tax debates are clashes of public versus private interests, and any policy’s effectiveness must be judged in such a debate.
by Lee Se-jung
The writer is a deputy business news editor of the JoongAng Ilbo.