The global tax juggernaut
Global leaders’ tax policies chase power over prosperity, burdening citizens while public debt grows.
The recent G20 meeting took place in Brazil, bringing together the heads of state and government from the world’s 20 leading economies. In a pompous and undeserved manner, the final declaration – the only official outcome of these extremely expensive meetings – begins with, “We, the Leaders.”
These so-called “leaders,” whether democratic, authoritarian, Marxist or nationalist, share little in common except for one goal: consolidating their own power, increasing control over citizens and introducing regulations, many of which infringe on individual freedom and privacy.
While paying lip service to climate change, they agreed to tax the rich and proposed global measures to enforce this.
In highly developed countries, tax revenues are already abundant. Citizens and businesses are taxed to the last penny, yet governments remain unsatisfied. Public debt continues to rise.
The relentless administrative pursuit of taxes has four major flaws. First, tax systems are so complex that they allow authorities to make arbitrary decisions. Second, they create significant challenges for businesses. Third, they impose heavy burdens on everyone. Finally, the cost-benefit calculation at the national economic level is disastrous.
More on global taxation and public debt
- The bleak future of public debt
- The secular threat of inflation and debt
- Higher digital taxes coming soon: A three-part saga
The debt crisis in many countries is not a revenue problem; it is an expense problem. Irresponsible policies, arrogance, ideological agendas and populism have led to enormous waste by governments worldwide.
The insatiable tax monster disregards these realities, tightening the financial screws on citizens and businesses while public debt still grows. Instead of adopting more economically friendly practices, these leaders revive the politics of envy with calls to tax the rich.
Governments do not suffer from a lack of tax revenue. They suffer from excessive expenses and irresponsible waste.
This approach ignores empirical evidence. Individuals, including billionaires, generally manage their finances more carefully and beneficially than public administrations do. Taxes are necessary and legitimate but should fund essential common interests – not allow governments to disproportionately expand their power and influence. Taxation should not become an instrument of excessive, populist and harmful redistribution, which often fails to reach individuals in need and instead vanishes into bloated bureaucracies.
To reiterate: Governments do not suffer from a lack of tax revenue. They suffer from excessive expenses and irresponsible waste.
Irresponsible leadership
How is this allowed? Parliaments are supposed to control budgets and ensure taxpayer funds are used responsibly. However, many parliamentarians rely on their political parties for their careers and often lack the skills to scrutinize fiscal policies effectively. This dereliction of duty represents a breach of fiduciary responsibility to citizens.
The U.S. has a theoretically effective tool in its “government shutdown” mechanism, which activates if spending exceeds certain limits. Unfortunately, it has degenerated into a bargaining chip in political disputes between the White House and Congress.
Some European countries, such as Germany and Switzerland, have implemented “debt brakes.” However, in Berlin, this safeguard is irresponsibly circumvented through the creation of so-called “special assets,” which are simply off-the-books debts.
Finance ministers in industrialized countries are often drawn from the political, administrative, or academic elite. They belong to the public sector and are paid by taxpayers. A refreshing change comes with the recent nomination of businessman Scott Bessent as U.S. Treasurer, who will hopefully bring a long-overdue perspective.
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