Friday, October 30, 2009

Taxpayers, Unite!

Taxes are paid in the sweat of every man who labors. If those taxes are excessive, they are reflected in idle factories, in tax-sold farms, and in hordes of hungry people tramping streets and seeking jobs in vain. – Franklin D.Roosevelt. 1932
A government taxes its citizens for protection of individual rights, freedom and property, to provide normal and safe conditions for the social and economic development. Government should cover its operation cost for these goals, and takes responsibility to use the balance to implement national development project s that cannot be otherwise done by private sectors alone. Few individuals elected to power get the right to spend this money. But In countries of partial democracy, these politicians have an interest not to report back how they spend the fund.
That is why taxpayers got united and demanded the government to implement laws for effective spending. The first taxpayers association was established in Australia in 1919, the second – in Sweden in 1921. Many other associations have established one after another first in Europe and finally becoming a world-wide movement. At present, taxpayers are a largest, most dynamically growing interest group.
In Mongolia, this movement came with the democratic wave. One of the latest groups is an organization whose name expresses its mission clearly: Mongolians for Fair Taxes and Wise Spending. This association was initiated by a group of citizens working in private sectors. It joined the world and regional associations and recently was elected to the board of the Asian and Pacific Taxpayers Union, which recently held a conference in Singapore. The major reason why taxpayers unions are growing fast around the world is that citizens of every democratic nation understand that the basic conditions for the dynamic growth of economic and social development are to have a less costly and more transparent government. Taxpayers have a legitimate right to demand the government in this way. In countries where the taxpayers have united their voices, public governance is relatively transparent, elected officials are relatively responsible; as a consequence, economy grows faster and people lead a better life.
In countries where taxes are lower, business sector competitiveness is higher. Lower taxes have a positive impact on a nation’s productivity. Mongolian employers pay a higher salary in order to hire better professionals. But, because higher salaries mean higher taxes, Mongolian labor value is set very low. An employer pays many types of taxes including medical, social insurance fees and personal income taxes of employees.
Currently in the labor market, hiring a professional with an western MBA degree requires 2 mil tugrugs of net salary and the employer pays about 600 tsnd tugrugs for this employee’s obligatory social, medical insurance and personal income tax. So that employee costs the employer 2.6 mil tugrugs per month. Foreign and international organizations, on the other hand, do not pay those taxes and the same employee for them costs 2 mil tugrugs a month.
If wages do not fully express the values created by an employee, this means that the economy is becoming more and more distorted. In Mongolia, evaluation of labor value is substantially low. If a blue collar worker has to change a public bus twice on the way to work, the actual salary he gets hardly covers his public transportation fee and lunch, leaving almost nothing for his family. This is the main reason why 10% of Mongolian labor force has immigrated and the remaining 90% is ready to do so if they can get a visa as all we, Mongolians know well. What is it behind the policies of our public officials who go abroad and ask every country to hire more Mongolians instead of creating normal living and working conditions in their own country? If taxes are low and a businessman has more to keep from the value he has created, he is more enthusiastic to extend his business.
That Is why all taxpayers must get united and demand the government to keep taxes low and spend them wisely. Public leaders are keeping in secret from us what the tax money is spent for while they enjoy their luxury cars and their custom tailored health insurance that pays for health treatments abroad.
The guarantee of a better life for us is not the government, but we, ourselves.
We taxpayers, from whom the government collects tax revenue, have the right and the responsibility to demand.
Taxpayers, unite!

No comments:

Post a Comment