Ending the Tortuous Torturous Journey
Twenty six years ago, we "collectively" chose a tortuous economic path, but it has been torturous to the masses and the middle class. The journey has decimated our aspirations, with an attendant beast-like emotions. Subsequently, every Nigerian is quick to find a culprit - corruption - a mindset that has acquired a life of its own. Is this supposition fundamentally right, or could it be that corruption is a natural reaction to an innocuous system, wrongly applied? Every human being reacts equally to the erosion of his or her wealth. An economic and political system in which trade and industry are controlled by private owners for profit, rather than by the state, is called capitalism. This means the State, that represents all and sundry, cedes these rights to a few amongst us. That privileged position demands that their profits be taxed adequately for common good.
Capitalism is a proven economic system for prosperity; but by ceding what belongs to all to the less than 1% of the population (the rich) for efficient management of resources without adequate tax on the accrued profit for the good of all, we create social inequality. We would have also, by default, denied government of resources for the provision of common good that should fill the gap for the basic human needs of the majority. In so doing, the majority in their quest to meet basic needs are at the mercies of those who possess the untapped (untaxed) liquidity within the system. Money that ought to have been paid as tax, but still in individual pockets, has become a dangerous weapon used by all of us to break the moral code of society. It has fuelled corruption to an obscene dimension.
People say that a radical approach is needed to reduce Nigeria's crazy level of inequality, I'd rather say: tolerating the high level of inequality in Nigeria is already radical (Boko Haram, MEND, etc). Two researchers, Emmanuel Saez and Thomas Pickety, who are helping the Obama administration in its argument to tax the rich higher in America, have been denounced by the conservative editorials of The Wall Street Journal. But that is politics. Presently, the American system taxes the rich 35 percent for earnings above $1 million - a level below what was before the Great Depression; if you default in America, you face stiff penalties. Obama wants to tax the rich more. Europe that was not as egalitarian as the U.S. now taxes between 60 percent and 80 percent for earnings above €1 million.
There has always been arguments that overtaxing the rich stifles job creation; but we have seen the opposite in Nigeria, where with almost zero tax, particularly the rich, creates mischiefs, instead of jobs. The untaxed liquidity is needed, in any case, to fix the infrastructural decay (light, mass transit on roads and rail, water, education, health, etc), but above all, secure security. Since government was invented in Mesopotamia, some 50,000 years ago, taxation has transformed human societies. Only tax receipts has proven to create, maybe not government managed, good economies of scale to better the state of society. Our experience is proof enough of waste, for instance, in oil resources as individuals generate key commodities like electricity and wasteful fuelling of low capacity "mass transit".
The efficiency of capitalism can easily be captured by its improved services and goods, but it is only through taxation that capitalism is maintained. Consider an analogy as a City (local government) worker, for example: after collecting my pay check I would service my house loan, car loan, put food on the table, pay school fees for my children, visit the dentist, cloth the family, etc. Each of the economic units that I have patronised is taxed by the City; and just before my next payday, these tax receipts are back to the treasury for me to be paid yet again. On my part, I would have rendered quality service to the city. Any discontinuity in this synergy will create the hell we are all living through. We should tax both stolen and genuinely earned wealth, to start. Tax will mop up excess liquidity that is causing mayhem, and with time, reduction in corrupt practices will be mitigated.
If Jonathan must succeed, he should embark without delay on a tax reform. His transformation agenda will come to naught without a robust tax policy. EFCC, instead of being scrapped, should be re-directed to police tax evasion and tax-evasion-collusion. It is the only way we can fight economic crimes without the coloration of politics, tribalism and nepotism. Just tax everybody's excesses and every other thing will fall in place. With a good Tax Bill by the National Assembly, tax collectors and tax evaders could be made to pay stiff penalties. That is what this society needs to bring back sanity to the polity and the economy. The other option is to do nothing about tax, but the time bomb ticks. I am not a prophet, but I strongly believe that a tax reform that reduces inequality in Nigeria will guarantee better security. The argument continues.
Samuel Akinyele Caulcrick,