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Taxes by an Islamic State

Many democracies, whether of the east or the west, levy high taxes, but provide little services to the weaker sections of the society, who happen to be in majority in every country of our times. Government after government raises taxes, and reduces services. For example, in the United States, every government has been cutting down on social benefits, health care, education, old age pension, etc., to a great majority of citizens who are getting poorer and poorer decade after decade. On the other hand, the number of billionaires is increasing at a steady pace. For instance, in the American Senate there are several billionaires, while quite a good number of that class sit in the House. The situation is much worse in several under-developing countries (where actually, political parties – as a whole – are getting richer). The men who are there at the helm of affairs are there to execute the policies approved by the rich.

Since it is the rich who bring the politicians to power, through campaign funding, it should not surprise anybody that they should be in the service of the rich protecting their interests. If individuals of the ruling class do well, or a political party does well, the rich bring them back to power. The two classes thus go hand in hand with each other. A recent study reveals that banks with political ties won larger chunks of money from the 850 billion dollar bail-out program of the American government than those who did not have political connections.

The common people’s function is to vote to power those that the two classes approve. Those that the two classes do not approve, are never brought to the notice of the masses, no matter how well qualified, how service oriented or how loyal to the nation and its people. The people therefore, do not even know of the existence of such individuals.

The memory of the Oklahoma bombing should be fresh. In this incident a young, white, American citizen blew up a van packed with explosives near a governmental building. Three hundred Americans died in that attack. (He was not publicized as a terrorist). What building was that in any case? It was the tax department. A few weeks ago, another white American, well-educated engineer crashed a small aircraft into a building; in the twin-tower fashion. He was not publicized as a terrorist either. What building was it in any case? It was the Federal Tax building in Texas. He left notes that as an entrepreneur, a contractor, and, recently, as an employee in engineering, he had learnt that all his efforts of several decades were not in his own service, but in the service of the tax department. He had visited the department several times to explain that no matter how hard he worked, whether as an employee or as an entrepreneur, he wasn’t able to save anything for his old-age because of the taxing system. He wrote in a note he left behind, that nothing but a dead body would teach the tax department a lesson, and, “you may have my dead body.”

But was the democratically elected government going to learn any lesson.

Now, change the name of the country from USA, to any other, and the system is the same, the taxes are the same, and difficulties for ordinary citizens the same. Everywhere the common man is being crushed under the load of increasing work hours, decreasing earnings in real terms, and increasing taxes. But there is nothing that can be done because of the two classes in league: the rich and the ruling classes, in which the rich plays the greater role. Find out who the richest in your country are, and you have identified the true rulers. In many democracies now, where votes are literally purchased, the two classes merge and a politician belongs to both, the rich as well as the political party.

And now we have the latest difficulty. Economic crunch. This happened, primarily because the ruling classes who own and operate the banks, kept lending money to the common man, entrepreneurs, and businessmen to keep them producing goods that they could market in other countries. It went on for decades until the other countries could not take their goods any more. So, a new system of trade was worked out, the Free Trade system, which was designed to force open the doors of economies shut so far; that is, those of the third world. However, although they were able to glut the markets of the third world countries (South America, South Asia, China), soon these countries began to produce same class of goods to same quality, but in great quantity and hugely less prices, to glut the markets of the traditional exporters – the West.

Initially, peoples of the Western countries merrily consumed the cheap goods coming in, on the basis of the indirect loans granted to them by the banks. They were allowing them endless credit facilities and uncontrolled liquidity. The entry of cheap but of reasonable quality goods, led to the closure of the local industries and ultimately, not only the economy began to depend on foreign goods (e.g. from China), but, unable to export in the same quality and quantity, the nations began to run into debts.

The policy of the banks (e.g. in USA) lending ever and ever more money to make the common man work harder and harder, longer and longer, and pay taxes more and more, backfired in housing. The mortgage system could not take the load of the inflated money-pressure and crashed. The sudden and massive non-payment of the home owners of the mortgage premiums, led to foreclosures, which led to price fall of the homes, affecting the entire construction industry. In the next step, the above factors led to unbearable losses to the banks. When the banks collapsed (more than a 100 leading banks in USA alone), the economy collapsed. How will be the recovery? Well, in the short term, printing of notes, but in the long-term, more taxes and, as predicted by some western economists, a collapse that will make the people to refer to the depression of the 1930’s as a picnic.

Islam does away with the taxing system in a variety of ways. Those that rule are elected by the elect (Ahl al-Hull wa al-`Aqd). So, they can neither be bribed (vote-purchase), nor can they make pre-election false promises to dupe the people. Only those who can deliver are brought to rule and summarily dismissed when they fail (there being no term allotted to them). A second factor is that an Islamic State need not keep a standing army. It trains young men for Jihad and are re-admitted into the economy, but available for military service on call. (A quarter of Mujahidin perform better than a million mercenaries). So, the defense expenditure is much reduced. If most countries spend 25-40% on defense, an Islamic government would spend only half or less. The huge amounts saved mean funds for welfare projects and therefore, less taxes. Further, the men serving in army turned into dormant Mujahids, leads to higher production, and thus to reduced cost of consumer, agricultural and industrial goods – an indirect benefit to the citizens.

Of course, there are several other ways in which an Islamic State reduces the taxes. The fairy dream of the last century but the Devil’s story of this century, that is, the role of the banks, or the role of Zakah, and other factors need to be taken into account; but which require detailed discussion, beyond the capacity of this column.

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