I am not an economist or financial expert. In fact, this can be safely said about the vast majority of Jordanians. And although we are always ready to pontificate on political and social issues, we normally shy away from discussing budgets, fiscal policies, economic plans, currency, prices, tax policies and stock price fluctuations from any other angle than the “how does it impact my pocket” angle.
Therefore, it follows that as the government began leaking the news of an impending hike in personal income tax over the Eid holidays, we, Jordanians, got busy calculating what we, personally, will have to pay and collectively came to the conclusion that we do not want to pay any more than what we are paying now, thank you very much.
Economists tell me that the real issue is not what we personally pay as income tax — because compared to other countries in the world the percentage is not that high — but the services we receive against that payment, which is where the scrutiny of the public should be focused.
Most agree that if the package of services provided by the government were commensurate to the personal tax burden, we would be more accepting of a tax hike. But these economists also rightly point out that the government does not want to be dragged into that conversation by the public because it would create what it calls a “conflict of interest”, i.e., the government would be working against its own financial interest if it promised and, more importantly, delivered benefits and services against payments.
They quote the example of public transportation. Currently the government makes us pay for two cars every time we buy one: one for us and one for the government, in taxes.
If the government provided a working public transportation system, there would be less demand on cars, as people would start using the public transportation system, which most likely the government would also have to subsidise.
So what is the financial incentive for the government to invest in a workable public transportation system when it is looking at losing the money from car purchases, while being required to increase investment and probably subsidise a very expensive public transportation system?
Let me put this aside for a moment.
The question I had put forward to the economists and other experts I talked to as I was considering the leaked news on taxes was: Does a government — any government — have to consider public opinion when formulating economic policies?
Of course the answer very quickly came back that elected, politically representative and democratic governments do consider the opinion of the public when that opinion is “informed” and the people behind the opinion are “cohesively organised into social and political networks”.
So many qualifiers on both the side of the government and that of the citizens believe that to delve into those issues would really open a huge Pandora’s Box on commitment to democracy and where we are on political parties and social cohesion and what got us there.
Those qualifiers as they are, however, lead us to conclude quickly that we in Jordan, at this time in our history, have no chance of meeting the criteria that would allow me, and other Jordanians, to protest the government’s single-handed decision to tax us without considering our opinion.
I believe the government has a moral and ethical responsibility to consider our opinion — albeit “ignorant” and “fragmented” — as it considers taking steps to dig deeper into our pockets without adding tangible value to the quality of our lives.
And we can all laugh at the proposition that there would be a moral and ethical government — we all know these are not common attributes of politicians anywhere in the world — or that any of its decisions would not be solely driven by its self interest — remember the car example — but I believe it would significantly add to its credibility, and public stability, if it at least appeared to “care” about the people, their opinion and their interests.
And just so that we are not labelled “dreamers” or “idealists” who are not in touch with reality, I will add: we know that this is an imposed economic reform plan by international organisations that do not “care” about public opinion; we know that we live in a geographically and politically active volcano and that we have a “role” to play; we know that we have lived beyond our means for so many years and that this level of expenditure is unsustainable with currently available resources; and we know that we pay taxes to support the government maintain the security and stability of the country which we crave as a people more than any other commodity.
But we also know that our pockets should not be the only factor considered in the tax package formula and that the government should work to incentivise the informal sector to declare itself and, as a result, widen the baseline from which the government collects tax on income.
As it should also revise all the “benefits” and “breaks” it had extended to sectors that may not need the government compassion as much as we, the citizens, do at this time.
We also know that the government should provide us with an immediately implementable plan to synchronise increased taxes with an equitable and relatable package of benefits and services that relieve or at least lessen the financial burden on citizens.
We know that the government should consider social cohesion and internal stability issues, as it makes the pie smaller and smaller driving a wedge along tighter and increasingly less tolerant geographic considerations.
Finally, and most importantly, we know that the government needs to strategically and significantly overhaul its communication and “spin” strategies and plans so it, at least, appears as if it cares about public opinion as it is taking decisions that impact the lives of all of us.