Budget witnesses usually explain the complexity of the tax system by saying that “there’s no other way” and “otherwise people won’t pay.” When you ask them what exactly these taxes are for, they usually put defense first. How can we do without it, they say, you see what’s going on. At bottom, the most advanced among them will even agree that all other expenses—pensions, social programs, doctors, teachers—are unnecessary and can easily be shifted from the tired shoulders of the state onto the impudent taxpayer who has grown fat on provisions hidden from the state. But that, they say, changes nothing. The expenses are still such that we need this huge and mind-bending tax system.
Fine. Let’s look at last year’s budget. There we see our “necessary” expenses: 34 billion for bureaucrats and 28 billion for the armed forces. Let’s assume that nothing here needs to be cut, and let’s even double the military expenses, bringing us to 56 billion. Total government spending: 90 billion. Let’s say our population is 40 million, of which 6 million are children under 14, plus disabled people and others with certificates—let’s say minus 10 million total, leaving 30 million to cover 90 billion in expenses. So, in the case of a per capita tax, the amount per head per year would be a full 3,000 hryvnias. Let someone tell me that’s a lot. Let’s even assume we need to add police and other law enforcement to the list of necessary expenses. Fine. Let’s even accept that nothing there needs to be cut and add another 48 billion. Still, about 5,000 hryvnias fall to each impudent taxpayer’s mug. Per year.
That is, if the question really stood as the statists present it (taxes exist for government expenses), it would present no problem whatsoever. We take necessary expenses, divide by the number of impudent taxpayer mugs, and get the per capita tax amount. An amount that, as we can see, is quite manageable for an ordinary household.
So where does this tax hell come from, the taxation of enterprises, indirect taxes, VAT, from which there is nowhere to hide? Where do all these legalized payments for “services” come from, for which we’ve already paid in the form of taxes? Where does this regulation come from, which treats every penny that passes by the budget as a crime? It’s because (and not only in this country, but all over the world) taxes don’t actually exist for government expenses, but government expenses exist for taxes. That is, the growth of taxes (and the income of sovereign and near-sovereign people) is the goal, and the growth of government expenses is the means to achieve this goal.
Until we understand this, no reforms can even be discussed.