How much government can Zimbabwean tax-payers afford?
The answer to this question depends largely on who you ask. If you asked me, I would say that one of the more important lessons of the past thirty years of one party rule is the danger of an overbearing, almighty central government which accretes power and uses it to perpetuate its incumbency. Inevitably, such a regime extracts an increasingly larger share of national resources through taxation and (in the case of the Zimbabwe government) by outright confiscation using extra-legal means. For me, the smaller the government, the better.
What is a smaller government, you may ask? Broadly speaking, a government which has no political limits on the revenues it can collect through taxation is too large. A government which directly controls upward of a tenth of GDP ought to be considered too large in the absence of extraordinary circumstances. But why a tenth? Well, one tenth is psychologically significant by tradition spanning centuries across most world cultures. Ten per centum seems to be the point where corporations and individuals begin to resist the collection efforts of the tax man. After all, even the gods above seem to ask for no more than a tenth for charity. Why should this thing called government deserve more than the gods who supposedly determine our destinies?
Zimbabwe's GDP is progressively estimated at about 5 billion United States dollars and conservatively thought to be a billion dollars less. If we accept the latter estimate, we immediately realize that if the Zimbabwean taxman is collecting anything approaching a billion dollars a year, then he is taking way more than the 400 million he may is fairly entitled to. Under Finance Minister Tendayi Biti's current budget, the government expects to collect in excess of a billion dollars this year. This is more than 20% of GDP and clearly way above the psychological barrier of 10% that we established above.
It appears safe to conclude that the Zimbabwe government as presently constituted is a financial burden on the people of Zimbabwe and should be trimmed so that it focuses only on its primary responsibilities: education, health and safety. Any new political dispensation which does not refocus a future government back into a more limited role will be a lost opportunity.
The answer to this question depends largely on who you ask. If you asked me, I would say that one of the more important lessons of the past thirty years of one party rule is the danger of an overbearing, almighty central government which accretes power and uses it to perpetuate its incumbency. Inevitably, such a regime extracts an increasingly larger share of national resources through taxation and (in the case of the Zimbabwe government) by outright confiscation using extra-legal means. For me, the smaller the government, the better.
What is a smaller government, you may ask? Broadly speaking, a government which has no political limits on the revenues it can collect through taxation is too large. A government which directly controls upward of a tenth of GDP ought to be considered too large in the absence of extraordinary circumstances. But why a tenth? Well, one tenth is psychologically significant by tradition spanning centuries across most world cultures. Ten per centum seems to be the point where corporations and individuals begin to resist the collection efforts of the tax man. After all, even the gods above seem to ask for no more than a tenth for charity. Why should this thing called government deserve more than the gods who supposedly determine our destinies?
Zimbabwe's GDP is progressively estimated at about 5 billion United States dollars and conservatively thought to be a billion dollars less. If we accept the latter estimate, we immediately realize that if the Zimbabwean taxman is collecting anything approaching a billion dollars a year, then he is taking way more than the 400 million he may is fairly entitled to. Under Finance Minister Tendayi Biti's current budget, the government expects to collect in excess of a billion dollars this year. This is more than 20% of GDP and clearly way above the psychological barrier of 10% that we established above.
It appears safe to conclude that the Zimbabwe government as presently constituted is a financial burden on the people of Zimbabwe and should be trimmed so that it focuses only on its primary responsibilities: education, health and safety. Any new political dispensation which does not refocus a future government back into a more limited role will be a lost opportunity.
No comments:
Post a Comment