How taxes can enhance democracy, not cheat it

[webfact]

How taxes can enhance democracy, not cheat it

By The Nation

 

 

A relatively simple accounting adjustment could put us on the road to more transparent and efficient government

 

Thailand’s current state welfare-card system, which covers more than 14 million low-income citizens, serves as a potentially powerful tool to make the country’s democracy work better in the near future.

 

Registered on the national database are 8.3 million people whose income is under Bt30,000 per year or Bt2,500 per month. Of this number, 2.9 million are farmers, the rest engaged in other professions. They are among the poorest segment of the population and certainly in need of state subsidies.

 

The state welfare-card database includes another 5.7 million people whose earnings are less than Bt100,000 per year or Bt8,300 per month. This group is not as poor, so recipients have to meet other conditions to qualify. First, they must be at least 18 years old with financial assets valued at less than Bt100,000. If they own a house, the area must not exceed 25 square wah. If they have a condo unit, it can’t be bigger than 35 square metres. And land owned must not exceed 10 rai per farmer and one rai per non-farmer.

 

Overall, the government spent Bt19.2 billion in 2017 and more than Bt27 billion in 2018 and has earmarked Bt53 billion for this year to subsidise the economic wellbeing of eligible citizens under the state welfare-card system. Using digital and other technologies to implement the system and pay out state money to those who need it help ensures transparency and boosts the potential to turn the database into a crucial part of the broader income-tax system.

 

In a working democracy, an effective tax system that covers most of its citizens – both taxpayers and non-taxpayers – is required. At present there are just over 10 million Thais registered in the personal income tax system, with even fewer people actually paying tax due to an exemption granted those earning less than Bt150,000 per year. In other words, the power of our democracy is barely supported by the majority of citizens who pay taxes and seriously care how the government uses their tax money.

 

To tackle this challenge, both taxpayers and tax-benefit recipients such as the 14 million citizens who directly receive state welfare should be on the same database. This would help enhance greater accountability and transparency among elected politicians. The days when unscrupulous politicians turn to innocent voters to win their support via the use of tax money in an irresponsible way should end now.

 

By developing the current state welfare-card system into a more advanced approach, poor and low-income citizens should get a basic monthly income directly from the Revenue Department as mandated by the government. This would usher in a new era of more transparent politics, especially in view of fiscal prudence and curbs on abusive populist policies. Overall, the country’s democratic governance system will work better when more citizens are on the personal income tax system, covering both taxpayers and tax-benefit recipients.

 

At the least, there would be a combined 24 million citizens in the database, accounting for about half of the 50 million people who are eligible to vote in the March 24 general election.

 

Source: http://www.nationmultimedia.com/detail/opinion/30364556

 

-- © Copyright The Nation 2019-02-22

[Samui Bodoh]

"...Thailand’s current state welfare-card system, which covers more than 14 million low-income citizens, serves as a potentially powerful tool to make the country’s democracy work better in the near future..."

 

Wrong.

 

While it sometimes sounds good on paper, this kind of system is remarkably easy to manipulate for political purposes, thus making it a powerful tool for abusing a Democratic system.

 

Targeted assistance in the Thai model of delivering aid suffers from one great flaw; the rules for beneficiaries can be changed at a moments notice, and thus it is open to political abuse. For example, does anyone believe that all the current benefits will remain post-election? Especially if voters vote the 'wrong way'? If rice farmers do not support the Junta and it remains in power, does anyone believe that rice farmers will continue to receive the same benefits as, for example, rubber farmers? Conversely, if the 'Red' faction somehow wins, does anyone believe that rubber farmers will retain the same benefits as rice farmers?

 

The flaw here is that the benefits are only available to those who register, and thus whomever decides the terms under which assistance is granted has huge power to decide who actually receives assistance.

 

If Thailand wants to see a system whereby assistance to the poor is given without political interference, then Thailand needs to define goals/levels/minimums for all its citizens and then allow anyone who meets those goals to participate in the plan. For example, if Thailand states that all Thais need a minimum of 5,000 Baht a month to live on, then all who do not have 5,000 Baht a month are eligible to receive a top up.

 

A system where the standards are set in advance so that any/all may participate is superior to one where all who register then get told what they need/get.

 

[727Sky]

I do not like taxes or free hand outs as all over the world the system is abused to buy votes or give special privileges to those in favor. If any country wants to help the poor provide infrastructure, education, and jobs; which is money well spent IMO.

[mfd101]

One of the problems with personal income tax is that those who should be paying a lot of tax are often able to dodge paying much or anything. And that applies also in 'Western' countries whose corruption levels are way lower than here.  If the figure above of some 10 million registered for personal income tax is accurate, however, that sounds about right for the Thai population, given widespread poverty. It would be interesting to know what proportion of the government's income comes from personal income tax.

 

A partial solution is indirect taxation (ie GST/VAT or other taxes on consumption). That's quite an effective way for governments to rake in the shekels but of course it's non-progressive except to the extent that richer people consume more consumables of all kinds than poorer people.

[brain150]

1. All taxes are theft !

2. Governments don't need taxes to finance anything ! They issue bonds to do so !

3. No Government has any right to collect any data on its citizens unless they are criminals.

4. Socialism never worked and never will ... so much to the Government stealing money from some to give it to others. A well fare system has to be based on free will not on theft by violence

 

The poor are poor because the powerful make and keep them poor !

The propaganda above is just this: Propaganda !

 

Governments are there to SERVE and not to CONTROL [even though the word "govern" actually means "to control" - "ment" comes from "mind" ... so, Government actually means: To control the mind !!!]

[khunPer]

8 hours ago, Samui Bodoh said:

For example, if Thailand states that all Thais need a minimum of 5,000 Baht a month to live on, then all who do not have 5,000 Baht a month are eligible to receive a top up.

That sounds fair enough, the problem is just, if it's too easy to state that ones income is under 5,000 baht a month, as only a minority of the Thais are registered as tax payers (the article mentions 10 million).

 

It's not like in many, or most, Western countries, where the government knows almost everything about everybody when it comes to taxable assets and income – I'm especially thinking about my Scandinavian home country – whilst in Thailand, income tax for most is as remote as a Sibirien village.

 

Agree in vote-buying problems and different promises before elections.

 

In Scandinavia they used the median income (the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below) to justify poverty, by stating it's below half of the median income, and value of assets is below what might equal 100,000 baht. They could use that, as almost all income is registered in the tax-system – those not registering income are the ones making illegal "black money" – but even so, it didn't work well enough, and was officially given up. In Thailand, I presume, we cannot trust the median income figure, as too much money change hands untaxed, without any official knowledge.

 

I know of farmer families that has registered as low-income and is eligible to 500 baht extra a month per family member registered in the House Book, even they are not that low income and actually running a good business. The 5.7 million earning less than 100,000 baht per year, or 8,333 baht a month, include the ones paid the minimum salary (305 baht to 320 baht a day) and working 6 days a week. The 8.3 million with an annual income less than 30,000 baht a year might include many elder, that indeed could need support. Yes, the 5,000 baht a month sounds like a fair dividing line.

 

And I'm not sure copying the Scandinavian welfare and socialist redistribution model is as good, as it might initially sound...????

[Krataiboy]

2 hours ago, brain150 said:

1. All taxes are theft !

2. Governments don't need taxes to finance anything ! They issue bonds to do so !

3. No Government has any right to collect any data on its citizens unless they are criminals.

4. Socialism never worked and never will ... so much to the Government stealing money from some to give it to others. A well fare system has to be based on free will not on theft by violence

 

The poor are poor because the powerful make and keep them poor !

The propaganda above is just this: Propaganda !

 

Governments are there to SERVE and not to CONTROL [even though the word "govern" actually means "to control" - "ment" comes from "mind" ... so, Government actually means: To control the mind !!!]

You sound like a fan of Stefan Molyneux.

[Srikcir]

14 hours ago, webfact said:

the power of our democracy is barely supported by the majority of citizens who pay taxes and seriously care how the government uses their tax money. (my bold)

Getting a little ahead of ourselves are we?

You can't support a democracy that barely, if at all, that doesn't exist.

[BritManToo]

14 hours ago, webfact said:

Thailand’s current state welfare-card system, which covers more than 14 million low-income citizens, serves as a potentially powerful tool to make the country’s democracy work better in the near future.

Thailand isn't a democracy.

If it were Thaksin would be prime minister.

[Sir Dude]

1 hour ago, BritManToo said:

Thailand isn't a democracy.

If it were Thaksin would be prime minister.

Correct...it's a plutocracy.

[ratcatcher]

14 minutes ago, Sir Dude said:

Correct...it's a plutocracy.

Probably more of an oligarchy, 

_{Oligarchy (from Greek ὀλιγαρχία (oligarkhía); from ὀλίγος(olígos), meaning 'few', and ἄρχω (arkho), meaning 'to rule or to command')^[1][2][3] is a form of power structure in which power rests with a small number of people. These people may be distinguished by nobility, wealth, family ties, education or corporate, religious, political, or military control. Such states are often controlled by families who typically pass their influence from one generation to the next, but inheritance is not a necessary condition for the application of this term.}

_{Just about sums up the situation in LOS.}

_wiki.