PHOTO: 123RF In tax, fairness is essential. People with equal resources should contribute equally. But that isn’t currently the case, argues Max Rashbrooke.
OPINION: Why do we pay taxes?
Because the money we own and earn, although often generated through our own efforts, is also partly due to two other factors: luck, including the talents we were fortunate to be born with; and communal infrastructure, in the sense of the collectively built schools, hospitals and roads we all use. So we pay tax to maintain that collective infrastructure and compensate the unlucky.
In tax, fairness is essential. People with equal resources should contribute equally. But that isn’t currently the case. A rest home carer, say, pays tax on every dollar of their $50,000 salary. But someone who buys a house and sells it six years later for a $50,000 profit pays no tax on that gain. This is profoundly unfair.
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