| To tax or not to tax - this question
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| | income and economic activity;Forced every
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| could have never been asked twenty years
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| | member of society to - directly or
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| ago.Historically, income tax is a novel
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| | indirectly - pay for professional
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| invention. Still, it became so widespread
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| | services related to his tax obligations,
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| and so socially accepted that no one
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| | or, at least to consume his own resources
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| dared challenge it seriously. In the
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| | (time, money and energy) in communicating
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| lunatic fringes there were those who
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| | with authorities dealing with tax
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| refused to pay taxes and served prison
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| | collection.Thousands of laws, tax
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| sentences as a result. Some of them tried
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| | loopholes, breaks and incentives and
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| to translate their platforms into
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| | seemingly arbitrary decision making, not
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| political power and established parties,
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| | open to judicial scrutiny eroded the
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| which failed dismally in the polls. But
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| | trust that a member of the community
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| some of what they said made
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| | should have in its institutions. This
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| sense.Originally, taxes were levied to
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| | lack of transparency and even-handedness
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| pay for government expenses. But they
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| | led to the frequent eruption of scandals
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| underwent a malignant transformation.
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| | which unseated governments more often
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| They began to be used to express social
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| | than not.All these very dear prices might
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| preferences. Tax revenues were diverted
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| | have been acceptable if taxes were to
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| to pay for urban renewal, to encourage
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| | achieve their primary stated goals. That
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| foreign investments through tax breaks
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| | they failed to do so is what sparked the
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| and tax incentives, to enhance social
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| | latest rebellious thinking.At first, the
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| equality by evenly redistributing income
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| | governments of the world tried a few
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| and so on. As Big Government became more
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| | simple recipes:They tried to widen the
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| derided - so were taxes perceived to be
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| | tax base by better collection,
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| its instrument and the tide turned.
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| | processing, amalgamation and crossing of
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| Suddenly, the fashion was to downsize
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| | information. This way, more tax payers
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| government, minimize its disruptive
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| | were supposed to be caught in "the net".
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| involvement in the marketplace and reduce
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| | This failed dismally. People found ways
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| the total tax burden as part of the
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| | around this relatively unsophisticated
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| GNP.Taxes are inherently unjust. They are
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| | approach and frequent and successive tax
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| enforced, using state coercion. They are
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| | campaigns were to no avail.So,
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| an infringement of the human age old
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| | governments tried the next trick in their
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| right to property. Money is transferred
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| | bag: they shifted from progressive taxes
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| from one group of citizens (law abiding
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| | to regressive ones. This was really a
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| taxpayers) - to other groups. The
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| | shift from taxes on income to taxes on
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| recipients are less savoury: they either
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| | consumption. This proved to be a much
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| do not pay taxes legally (low income
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| | more efficient measure - albeit with
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| populations, children, the elderly) - or
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| | grave social consequences. The same
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| avoid paying taxes illegally. But there
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| | pattern was repeated: the powerful few
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| is no way of preventing a tax evader from
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| | were provided with legal loopholes. VAT
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| enjoying tax money paid by
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| | rules around the world allow businesses
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| others.Research demonstrated that most
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| | to offset VAT that they paid from VAT
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| tax money benefited the middle classes
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| | that they were supposed to pay to the
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| and the rich, in short: those who need it
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| | authorities. Many of them ended up
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| least. Moreover, these strata of society
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| | receiving VAT funds paid the poorer
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| were most likely to use tax planning to
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| | population, to which these tax breaks
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| minimize their tax payments. They could
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| | were, obviously, not available.Moreover,
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| afford to pay professionals to help them
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| | VAT and other direct taxes on consumption
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| to pay less taxes because their income
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| | were almost immediately reflected in
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| was augmented by transfers of tax money
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| | higher inflation figures. As economic
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| paid by the less affluent and by the less
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| | theory goes, inflation is a tax. It
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| fortunate. The poor subsidized the tax
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| | indirectly affects the purchasing power
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| planning of the rich, so that they could
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| | of those not knowledgeable enough, devoid
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| pay less taxes. No wonder that tax
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| | of political clout, or not rich enough to
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| planning is regarded as the rich man's
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| | protect themselves. The salaries of the
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| shot at tax evasion. The irony is that
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| | lower strata of society are eroded by
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| taxes were intended to lessen social
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| | inflation and this has the exact same
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| polarity and friction - but they achieved
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| | effect as a tax would. This is why
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| exactly the opposite.In economies where
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| | inflation is called the poor man's
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| taxes gobble up to 60% of the GDP
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| | tax.When the social consequences of
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| (France, Germany, to name a few) - taxes
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| | levying regressive taxes became fully
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| became THE major economic disincentive.
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| | evident, governments went back to the
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| Why work for the taxman? Why finance the
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| | drawing board. Regressive taxes were
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| lavish lifestyle of numerous politicians
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| | politically and socially costly.
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| and bloated bureaucracies through tax
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| | Progressive taxes resembled Swiss cheese:
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| money? Why be a sucker when the rich and
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| | too many loopholes, not enough
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| mighty play it safe?The results were
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| | substances. The natural inclination was
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| socially and morally devastating: an
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| | to try and plug the holes: disallow
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| avalanche of illegal activities, all
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| | allowances, break tax breaks, abolish
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| intended to avoid paying taxes. Monstrous
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| | special preferences, eliminate loopholes,
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| black economies were formed by
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| | write-offs, reliefs and a host of other,
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| entrepreneuring souls. These economic
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| | special deductions. This entailed
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| activities went unreported and totally
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| | conflicts with special interest groups
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| deformed the processes of macroeconomic
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| | whose interests were duly reflected in
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| decision making, supposedly based on
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| | the tax loopholes.Governments, being
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| complete economic data. This apparent
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| | political creatures, did a half hearted
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| lack of macroeconomic control creates a
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| | job. They abolished on the one hand - and
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| second layer of mistrust between the
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| | gave with the other. They wriggled their
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| citizen and his government (on top of the
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| | way around controversial subjects and the
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| one related to the collection of
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| | result was that every loophole cutting
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| taxes).Recent studies clearly indicate
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| | measure brought in its wake a growing
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| that a reverse relationship exists
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| | host of others. The situation looked
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| between the growth of the economy and the
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| | hopeless.Thus, governments were reduced
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| extent of public spending. Moreover,
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| | to using the final, nuclear-like, weapon
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| decades of progressive taxation did not
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| | in their arsenal: the simplification of
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| reverse the trend of a growing gap
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| | the tax system.The idea is aesthetically
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| between the rich and the poor. Income
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| | appealing: all tax concessions and
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| distribution has remained inequitable
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| | loopholes will be eliminated, on the one
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| (ever more so all the time) - despite
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| | hand. On the other, the number of tax
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| gigantic unilateral transfers of money
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| | rates and the magnitude of each rate will
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| from the state to the poorer socio -
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| | be pared down. Marginal tax rates will go
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| economic strata of society.Taxes are
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| | down considerably and so will the number
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| largely considered to be responsible for
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| | of tax rates. So, people will feel less
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| the following:They distorted business
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| | like cheating and they will spend less
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| thinking;Encouraged the misallocation of
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| | resources on the preparation of their tax
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| economic resources;Diverted money to
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| | returns. The government, on its part,
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| strange tax motivated
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| | will no longer use the tax system to
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| investments;Absorbed unacceptably large
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| | express its (political) preferences. It
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| chunks of the GDP;Deterred foreign
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| | will propagate a simple, transparent,
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| investment;Morally corrupted the
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| | equitable, fair and non arbitrary system
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| population, encouraging it to engage in
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| | which will generate more income by virtue
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| massive illegal activities;Adversely
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| | of these traits.Governments from Germany
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| influenced macroeconomic parameters such
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| | to the USA are working along the same
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| as unemployment, the money supply and
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| | lines. They are trying to stem what is in
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| interest rates;Deprived the business
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| | effect a tax rebellion, a major case of
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| sector of capital needed for its
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| | civil disobedience. If they fail, the
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| development by spending it on non
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| | very fabric of societies will be
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| productive political ends;Caused the
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| | affected. If they succeed, we may all
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| smuggling of capital outside the
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| | inherit a better world. Knowing the
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| country;The formation of strong parallel,
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| | propensities of human beings, the safe
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| black economies and the falsification of
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| | bet is that people will still hate to see
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| economic records thus affecting the
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| | their money wasted in unaccounted for
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| proper decision making
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| | ways on bizarre, pork barrel, projects.
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| processes;Facilitated the establishment
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| | As long as this is the case, the eternal
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| of big, inefficient bureaucracies for the
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| | chase of the citizen by his government
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| collection of taxes and data related to
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| | will continue.
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