Even more tragic is that we don’ t seek a solution in the time and place of the productive process (i.e. in commercial enterprises, in factories etc), where the wealth of our society exists. Instead, we seek a solution as far as possible (in the stock market, in banks, in “charitable” institutions, even in churches).
The situation reminds us of a joke which is about a drunkard who was looking for his keys not in the place he had left them, but under a lamppost, because there was light.
We believe that we should seek a solution in the time and place of the productive process.
Let’s start from the beginning:
We have an enterprise (a business) of any kind, big or small, private, co-operative,commercial, industrial, agricultural or stockbreeding. Suppose this enterprise starts operating on the 1st of January of the current year. Our businessman, as a reasonable man, takes into consideration the following:
How much I’m going to need for rent, salaries,insurance,raw materials, equipment, cars etc. Everyone has to be paid in time. He has taken everything into consideration except for one thing.
He hasn’ t taken into consideration the tax he has to pay to the state. On the other hand, the state has provided everything to him ( the policeman, the priest, the doctor, the teacher, the judge, the taxman etc.).
And he is going to repay this obligation ( to society in general) only if he’s got profits!
It may sound unreasonable, but this is the truth. The state will provide the businessman with its service in advance but it will also collect the taxes, only if the enterprise has got profits.
Imagine how irrational it is, if the businessman told his suppliers, banks, employees that he would pay them only if he had profits.
In real economy this essential parameter is unknown (something like a taboo) and it will remain unknown as long as circumstances allow it.
However, this is a contradiction in world economy where all problems stem from. Why does the state accept this contradiction?
A foolish answer to this, is because our ancestors did it this way.
A second explanation is that the state cannot estimate in advance the amount of money it’s going to ask from the businessman.
“Let him pay us when he’s got the first profits,10, 20, 30 per cent”.
On the other hand, a situation like this is convenient for the businessman too.
It’s not of minor importance for a businessman to start a business without knowing in advance the parameter of taxation.
Third: If the state finds a way to estimate in advance the amount of money it’s got to pay as tax, then the profit that our businessman makes at a certain period of time, will be all his own.
No state and no God will have the moral right to ask for his percentage on net profit for a second time. We are mistaken: And the state believes that it comes off best as well as the businessman.
The truth is that both of them are losers.
And this is indicated by today’s world economic crisis. Both the state and the businessman are losers.
The state now,after the event, without any moral scruples, intends to reduce the deficit of the budget,with VAT, the cubic capacity of our car, our parents’ inheritance, taxation, donations to SOS villages and everything else which is in the perverted mind of some economists.
On the other hand,the businessmen in turn, are protesting against taxraid, drying up of the market, lack of cash, tax settlement and they are trying to defend their rights by using groundless arguments.
Let’s say it once again: If we don’ t go beyond our ideology , we are not going to enter a new world! New world means new forms of ownership, new taxation system which will predefine the taxation of enterprises not according to incomes, expenses and profits, but according to the number of employees in a business. Only then the unknown parameter of economy won’ t be unknown any more (see vostiniotismos. Blogspot. Com “The state and the lump sum”). Only then, huge productive forces will be released.
When, for example, an earthquake destroys all the buildings in a country, the responsible ones are the engineers and the architects who built them. In the same way, the economists are responsible for the breakdown of an economic system.
Some of them, instead of taking their responsibilities, have assumed the most horrible role: That, of explaining to people through TV channels and newspapers, that misery, poverty, debts, unemployment and hunger are natural in this life. Thank goodness they aren’ t saying that we will live a good afterlife!
Vostiniotis Panagiotis
Economist
