{"id":128950,"date":"2019-03-11T12:00:37","date_gmt":"2019-03-11T12:00:37","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=128950"},"modified":"2019-03-05T14:32:50","modified_gmt":"2019-03-05T14:32:50","slug":"taxes-or-debt","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2019\/03\/taxes-or-debt\/","title":{"rendered":"Taxes or Debt?"},"content":{"rendered":"

Economists define \u2018the wealth of a society\u2019 as its total stock of useful assets \u2013 homes, cars, buildings, roads, factories, cattle, money, gold … et cetera<\/em>. Let us call this definition D1<\/strong>.<\/p>\n

A definition serves merely as a starting point for a logical exploration of related ideas. However \u2013 and necessarily \u2013 the direction which the exploration takes depends on the definition. In any discussion of ideas, a\u00a0conscious effort is needed to understand how it is influenced by the definitions of its basic terms.<\/p>\n

Furthermore, by questioning the basic definitions underlying a discussion \u2013 and trying out alternative definitions \u2013 one is able to explore a broader range of ideas, to think \u2018out of the box\u2019.<\/p>\n

That common-sense maxim can be applied to the concept of \u2018wealth\u2019.<\/p>\n

It turns out that the original definition of \u2018wealth\u2019, a few hundred years ago, was NOT D1<\/strong>. Originally, in Old English, the word \u2018wealth\u2019 was related to \u2018well-being\u2019, via the word \u2018weal\u2019. \u2018Wealth\u2019 meant, quite simply, \u2018that which brought well-being\u2019. Let us call this simpler definition D2<\/strong>.<\/p>\n

No doubt assets such as homes, cars, buildings et cetera<\/em> \u2013 as listed above \u2013 can contribute to well-being. But then so do health, education, talent, culture, music, happy families et cetera<\/em>. Thus it is clear that D2<\/strong> is a far broader definition of \u2018wealth\u2019 than D1<\/strong>.<\/p>\n

Some of the most priceless aspects of life \u2013 health, education, talent, culture, music, happy families … and more \u2013 are excluded from definition D1<\/strong>, but they would be included naturally in the more holistic definition D2<\/strong>. A few hundred years of material progress has squeezed the life out of our understanding of \u2018wealth\u2019!<\/p>\n

An example<\/em>: Say a penthouse of market value twenty million dollars is lying mostly vacant, only being occupied by its owner for a few weeks in a year. The value of this asset, according to definition D1<\/strong>, is of course twenty million dollars. However, by the criterion D2<\/strong>, this asset does not have much value, since \u2013 in terms of bringing well-being to individuals \u2013 this asset is not contributing much.<\/p>\n

Another example<\/em>: A highly skilled baker is in good health and has a happy family. By definition D1<\/strong>, he may not be well off; but by definition D2<\/strong>, he may be better off than a mega-millionaire.<\/p>\n

It is clear that the economists\u2019 definition of \u2018wealth\u2019 is missing out on certain priceless aspects of life \u2013 indeed those which make life worth living. Is it any wonder then that more and more people are finding life to be unbearable under the de facto<\/em> regime of the economists?<\/p>\n

Indeed, the following deadly con game based on so-called \u2018aggregate wealth\u2019 kicks in, robbing individuals of their very basic, human autonomy: It doesn\u2019t matter whether you think you are well off, because we have got gigabytes of data to prove that you must be well off<\/em>.<\/p>\n

\"\"<\/a><\/p>\n

Taxes<\/h2>\n

For the subsequent discussion, we shall take the original and the more sensible definition of \u2018wealth\u2019, which was denoted by D2<\/strong> above.<\/p>\n

Essentially due to the bounties of Mother Nature, in a hard-working society surplus wealth does accumulate over time. In a healthy, united society, the most natural policy should be to utilize the surplus wealth to ensure future well-being of the society. Indeed, even for economists, this should be a no-brainer.<\/p>\n

Of course details of what is considered \u2018surplus\u2019 may vary from society to society \u2013 but it is fair to assume that in every society there is some implied understanding of \u2018basic needs\u2019. Then \u2018surplus\u2019 is defined as that which would be left over after everyone\u2019s \u2018basic needs\u2019 are satisfied.<\/p>\n

The surplus wealth should be put to good use by the society; otherwise, by the inexorable principle of \u2018use it or lose it\u2019, the surplus wealth will erode over time. This is basic economics.<\/p>\n

In a healthy, united society, \u2018self-governance\u2019 would ensure that the surplus wealth is put to good use \u2013 towards health, education, infrastructure, the environment, and so on \u2013 so that the well-being of the society is ensured, at least for the foreseeable future.<\/p>\n

Ideally, \u2018self-governance\u2019 of the society would be based on voluntary contributions by all its members, because everyone would be concerned about the society\u2019s future well-being.<\/p>\n

But things go horribly wrong when a section of society \u2013 based on some self-proclaimed criterion \u2013 begin to consider themselves \u2018apart\u2019, or \u2018elite\u2019, or \u2018higher\u2019 \u2013 or any other such nonsense. Basically, the group is creating a pretext to claim a higher share of the surplus wealth. Any pretext will do.<\/p>\n

Once the society is thus divided, problems begin to multiply very rapidly.<\/p>\n

Surplus wealth, which should work for furthering the well-being of the whole society, becomes the object of private greed and rapacity. At that point, contributions to the society\u2019s future well-being are made \u2018mandatory\u2019, and viewed by people as \u2018coercive tax burden\u2019.<\/p>\n

Thereafter, the divided society must cope with two HUGE issues: (1) whether people will pay their fair share of the tax, and (2) whether the collected taxes will ensure the society\u2019s future well-being.<\/p>\n

The point to be noted is that the root cause of the problem is disunity within the society.<\/p>\n

Sadly, the path then becomes clear for the powerful to avoid paying taxes and view the society as their fiefdom. After all, they have the most influence over legal and legislative processes.<\/p>\n

Debt<\/h2>\n

\u201c<\/em>In this world nothing can be said to be certain, except death and taxes.\u201d<\/em>
\n\u2013 Benjamin Franklin<\/p><\/blockquote>\n

More recently, \u2018masters of finance\u2019 have added a third component to that deadly duo \u2013 namely, debt.<\/p>\n

Theory<\/em>: A loan should contribute to an individual\u2019s or a company\u2019s economic well-being. How? Simple: By putting the loan amount to work, the individual or company earns more than the principal and interest payable thereon, repays the loan \u2013 and thus comes out ahead.<\/p>\n

Toxic practice<\/em>: However, debt has become a legalized instrument to serve multiple toxic aims:<\/p>\n

    \n
  1. Politicians<\/em> borrow freely from future generations \u2013 that is, they incur huge amounts of public debt \u2013 to win their dirty games of politics today.<\/li>\n
  2. Rapacious creditors<\/em> exploit needy borrowers with higher interest burden and foreclosures.<\/li>\n
  3. Corporate bosses<\/em> utilize debt to doctor their balance sheets, puff up share price and boost the value of their stock options and bonuses.<\/li>\n
  4. Speculators <\/em>utilize debt to multiply the size of their gambles, through over-leveraging. In effect, they place bets on the society\u2019s future \u2013 either on its well-being or on its decline.<\/li>\n
  5. Corporate raiders<\/em> take over healthy companies with borrowed money, take private profits and then declare bankruptcy.<\/li>\n<\/ol>\n

    However, the biggest of the debt-based financial scams is the following:<\/p>\n

      \n
    1. The global uber-rich<\/em> squirm out of their tax obligations to any society on the planet, but opt instead to become the buyers of government and corporate debt. Thus they do not contribute to the future well-being of any society as fellow-citizens; instead they place bets on this or that society.<\/li>\n<\/ol>\n

      Speculators bet \u2018long\u2019 or \u2018short\u2019 \u2013 and they are least concerned with the well-being of any society. So, incredibly, the planet\u2019s future is in the hands of those who have no real stake in any society!<\/p>\n

      In fact speculators calculate that ordinary tax-payers can always be politically arm-twisted to pay up, or to sell off public assets at a discount. Paid-off leaders are easily procured to approve their plans.<\/p>\n

      All such cases of deception, exploitation and legalized robbing are touted as \u2018the working of free markets\u2019. Indeed, today the phrase \u2018free market\u2019 is no more than deceptive PR for the people sucking up the world\u2019s wealth like there was no tomorrow.<\/p>\n

      Taxes or Debt?<\/h2>\n

      There is a HUGE basic difference between taxes and debt. Taxes are legal obligations to the society; once the due amount is paid, it cannot be claimed back. Debt extended to a government creates a financial and political asset for the creditor, and a long-term liability for the debtor.<\/p>\n

      Taxes are paid by citizens; debt is an instrument of speculators.<\/p>\n

      By pushing hard for lower tax rates, speculators push governments to rely more and more on debt. But over-reliance on debt makes it much harder for societies to attain true welfare of its members. The profitable debt-based business model of the global uber-rich is designed to rob societies of their wealth.<\/p>\n

      The quaint term \u2018capitalism\u2019 is no longer apt for the conditions prevailing today, since debt has replaced real capital as the engine of the alleged economic well-being. \u2018Financialization\u2019 \u2013 or perhaps \u2018debitization\u2019 \u2013 is a better description. Toxic financialized economics tears societies apart; the best and the brightest learn only to suck life out of communities. And yet, believe it or not, \u2018mainstream economists\u2019 do not tell us all this!<\/p>\n

      The end-goal of the uber-rich is to \u2018own\u2019 the world, to enjoy the highest degree of material comforts and security possible, while not being committed to any single society or community on the planet. In fact this compulsion of the uber-rich is driving the geo-politics of globalization.<\/p>\n

      Much of history is driven by delusion.<\/p>\n

      _________________________________________________<\/em><\/p>\n

      Related link: <\/em>Response to a Bank Chairman<\/a><\/em>, <\/em>a Brief History of Debt<\/a><\/em><\/p>\n

      \"\"<\/a><\/em>Dr. Naresh Jotwani is a semi-retired academic living in India and a member of the TRANSCEND Network for Peace Development Environment<\/a>. Apart from part-time engagements in engineering education and consulting, he engages in an in-depth, personal exploration of how Gautam Buddha\u2019s profound discoveries and teachings can be applied to the acute problems of modern life.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

      Economists define \u2018the wealth of a society\u2019 as its total stock of useful assets \u2013 homes, cars, buildings, roads, factories, cattle, money, gold … et cetera. Let us call this definition D1. It turns out that the original definition of \u2018wealth\u2019, a few hundred years ago, was NOT D1. Originally, in Old English, the word \u2018wealth\u2019 was related to \u2018well-being\u2019, via the word \u2018weal\u2019. \u2018Wealth\u2019 meant, quite simply, \u2018that which brought well-being\u2019. Let us call this simpler definition D2.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-128950","post","type-post","status-publish","format-standard","hentry","category-editorial"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/128950","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=128950"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/128950\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=128950"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=128950"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=128950"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}