The Real Tax Fraud
"We don't think that the tobacconist is paying the duty on our cigarettes, nor the tobacco company that buys the stamps. Instead it's the consumer who does. Same with the barman and beer duty, same with our paycheques and the income tax that is taken out of them."
Unfortunately, the barman and practically every employee regard income taxes as being paid out of their hard earned gross income, that is what would be their due reward if income tax did not exist.
If we converted payroll taxes to a VAT on net pay, then it would be clear to all that the employee recipient is not the principal taxpayer. Actually this would immediately make exports more competitive as every exporter could claim back his payroll VAT payments. As an intermediate stage to tax reform, this could be a great advance for voter understanding and a great economic benefit for the country. It might turn out to be the easiest way forward too.
That companies and their employees are real taxpayers is a delusion that governments like to encourage to hide the real scale of taxation we all pay. Thus government inflates the prices of goods and services by taxing every productive sector. Voters become confused as to who really pays tax and who should be that isn't. It provides a multitude of opportunities for politicians to tinker. The success of this disinformation is that everyone believes it. By this means the huge cost of the state is hidden.
The true rate of tax on our personal consumption is about 45% of the cost of goods and services on average, whether we are rich or poor. But if implemented in full view at the point of sale, we would really know who pays tax - we all do and it is too much.
So much for democracy, when people and voters neither understand what they really earn (their disposable income) nor the tax that they pay (when they spend it). This is the real tax fraud.
Biting the hand that feeds IT
