AN editorial in a local newspaper last month opened with the observation that taxes were universally hated. That is an exaggeration.

Quite a few people in every society realise that if they do not want to have a constant war of every man against every man, they must have government, and that they must raise money to meet the cost of operating it, that is, pay taxes.

In a society of their own making they will identify the services this government is to provide and decide how much they will pay to that end. I recall an instance in which the residents of my town, including those whose children did not go to the local schools, voted to increase the property tax to fund improvements in the elementary schools.

Living in America I pay a variety of taxes (income, property, excise, sales among others) to the federal government, the Commonwealth of Virginia, the Fairfax County and the town of Herndon. I figure that in all I pay about 40 per cent of my earnings in taxes to these authorities. I am not happy with the federal government’s use of my taxes: it spends much of them on wasteful projects at home and abroad. But I am very pleased with the services that the state and local governments provide in return for the taxes I pay them.

Governments in Pakistan (federal, provincial, local) do a poor job of providing essential services (public education, healthcare, sanitation, potable water, etc.). Everyone, rich and poor alike, pays sales tax, and import and excise duties are passed on to the consumer. But the income tax in this country appears to be among the lowest in the world. It is my understanding that a person making around Rs100,000 a month pays only about six per cent of it in income tax.

Taxes are low not because the services provided are meagre. Their meagreness may be one of the explanations of the people’s reluctance to pay them. Taxes are low mainly because the government does not want to raise them. It prefers to provide for its reckless spending by borrowing at home and abroad and by resorting to the printing press. This attitude has disastrous consequences for the economy and society.

Prudence would require a government either to reduce its spending to match its revenue collection or, if the expenditures cannot be reduced, ask the people to accept a larger tax burden to meet the cost of projects they do not wish to give up. These are choices for the representatives of the people in parliament to make.

Some observers maintain that proceeds of the existing taxes in Pakistan will not suffice even to meet the government’s monthly payroll. These will have to be increased if huge borrowing is to be avoided. This can be done partly by increasing the rates of current taxes and partly by identifying untaxed incomes and taxing them. This brings us to the issue of taxing agricultural incomes.

All landowners, large and small, are citizens of Pakistan as much as shopkeepers, other businessmen, salaried employees, professionals, artisans and manual workers in cities are. The benefits of the country’s protection from external aggression extend equally to the urban and rural people. It follows that all Pakistanis, rural and urban, should share the cost of national defence. The same principle should apply to other government services of which both groups are the recipients.

There is no earthly reason why a farmer — one whose income comes from agricultural land — should not have to pay taxes to support the government that protects him.

It is noteworthy also that many of these farmers live in luxurious homes in the cities. They do not work on the land they own; they have tenants and servants who do the actual work for wages that are abysmally low. Some of the middle-level landowners who own tractors and harvesters do put in some work but it is not the kind that will break their backs. They are in any case prosperous enough to be able to pay taxes. Needless to say, small farmers who make less than a certain designated amount of money would be exempted from paying income taxes as the similarly situated folks in cities are.

Those who object to an agricultural income tax argue that it would be impossible to determine the taxable income of so many millions of farmers in the country, because the yield per acre of land will vary from one place to the next. This is not a valid objection. This difficulty should be met the way it is met in the case of urban shopkeepers (let alone vendors and hawkers) who do not keep books with the result that their income- and sales-tax liability cannot be accurately determined. The tax collector will have to take their word for it.

Physicians, lawyers, and other professionals in cities may be keeping books but there is no way to be sure that these are accurate. Once again the tax collector has to work on the basis of their declarations of income. The same can be done with a farmer: he can be asked to state his income on his tax return, calculate his tax liability and pay it. As in all other cases, the collector may look deeper into his declarations if they seem to be fraudulent.

As far as I have been able to determine, farmers in most other countries pay income tax as other citizens do. The real reason for the absence of an agricultural income tax in Pakistan is that its governments are still dominated by feudal lords (very large landowners) upon whom this tax will fall. Accustomed to being freeloaders, they do not want to be burdened with it. One may say that the time has come when commerce and industry, organs of civil society, the media and all other non-feudal groups should compel these feudal lords to start paying their share of the cost of operating the government and maintaining society in good order. That is not too much to ask.

I remember that the larger farmers used to pay a tax called ‘land revenue’ during British rule. Its collection was one of the district administration’s principal functions, as indicated by the fact that the deputy commissioner was also called the collector. I don’t know if this land revenue is still collected. If it is it should be replaced by the income tax advocated above.

The writer is a visiting professor at the Lahore School of Economics.

anwars@lahoreschool.edu.pk

AN offspring of the Chief Justice of Pakistan once again stands at the centre of a raging constitutional controversy.

The principal charge in the reference against deposed Chief Justice Iftikhar Chaudhry was that he used his influence first to get his C-grade son admitted to medical college and then to transfer him from the health service to the wholly unrelated but highly dreaded FIA.

The allegation now against the sitting chief justice is that he had the grades of his daughter improved from C to B to make her eligible for admission to a medical college against a seat reserved for the children of judges (what, pray, is the justification for this reservation?).

It is a sad commentary on the values and attitudes changing with the times that while the charge against Justice Iftikhar Chaudhry got submerged under a tide of protest by lawyers backed by politicians, the conduct of Justice Dogar has come under scrutiny in a committee of the National Assembly, in the Supreme Court (which has stopped the NA committee proceedings) and in the Islamabad High Court which has ordered Ms Dogar’s examination record to be sealed. Then there is also a pro bono publico petition in the Supreme Court against the NA committee.

Lawyers and civil society, unlike the support they extended to Justice Chaudhry, are asking for the resignation of Justice Dogar. The issue may not escalate into street protests but it has already let loose the frightening speculation that selection of his successor will not be based on seniority or calibre but on less wholesome extraneous considerations.

An end to the self-inflicted misfortunes of the superior judiciary, thus, is nowhere in sight. Political elements can only relish the prospect of the highest court of the land being divided and ridiculed.

The current face-off, or call it confrontation if you will, between a committee of the National Assembly and the Supreme Court has raised some constitutional questions which carry the germs of a wider and perpetual conflict between the legislative and judicial organs of the state. Resultantly, the balance of power may further shift in favour of the executive which is already exercising power much more than the executive should in a parliamentary democracy.

Mr Farhatullah Babar publicly sided with the parliamentary committee when it was restrained by the Supreme Court from discussing the Dogar issue. The parliament, he is reported to have said, is supreme. Since Mr Babar, curiously enough, is a spokesman for the president as well as for the PPP, his view can be taken to have the endorsement of both. Whether parliament is really supreme is a question that needs a more detached and detailed consideration.

Notwithstanding what Mr Babar had to say glibly, with a host of ministers chiming in, about the unquestioned supremacy of parliament, it can be safely argued that our parliament is supreme neither in the constitutional scheme nor in the estimation of the people, nor can it be so rated considering the part it has historically played, or is now playing, in national affairs.

The notion of parliamentary supremacy, so to speak, is a colonial inheritance. The parliament at Westminster which consists of the monarch, the hereditary and appointive House of Lords and the elected House of Commons is not just supreme, it is sovereign. The sovereignty of the parliament is expressed in its legislative enactments which along with some conventions and covenants form the constitution of Great Britain.

Pakistan, on the other hand, has a written constitution in which the responsibilities of the three branches of the state — legislative, executive and judicial — have been laid down. Further, even the legislative supremacy of parliament does not extend to the subjects which the constitution assigns to the provinces.

Despite constitutional limitations on its subjects and area, parliament could lay claim to being the most important, although not the supreme, organ of the state, if it were to initiate and enact laws with due deliberation. As it happens most laws in the form of ordinances are made by the president and later ratified verbatim by parliament. Parliament has been content with voicing the demands and grievances of the people through resolutions and, of late, by arraigning officials before its committees. Even the question hour has lost its lustre.

It is the constitution that is supreme and not any one branch of the state. All three branches are independent of each other and yet there is a fair degree of interdependence. If supremacy under the constitution is to be found at one place it is not in a branch but in the person of the president who is part of the legislative as well as of the executive. He appoints the chief justice and judges of the Supreme Court. He can and does issue ordinances which have the force of law. He can dissolve the National Assembly at his discretion but can only be removed himself by a two-thirds majority of the National Assembly and Senate sitting together.

From Jinnah to Zardari and running through Ghulam Mohammad, Iskander Mirza, Ayub, Yahya, Bhutto, Ziaul Haq, Benazir Bhutto and Nawaz Sharif, it has been the individual and not parliament that has been supreme. It is more so today. The supremacy of the president, or the chief executive, is shared only by the armed forces. It is more so today.

Consider just the following three out of many foreign press comments on the current locus of supremacy. The Economist: “[J]ust as the state does not control all the country, nor does Mr Zardari control all the state”. The Times of India: “Zardari is not thought to call all the shots in Pakistan. His wish is not the army’s command and it is the powerful military that may be the arbiter of the destiny of terrorist training camps on Pakistan’s soil”. The Atlantic: “Rawalpindi is a much more important address than Islamabad”.

The prevailing opinion at home is no different. In any case parliament means the National Assembly, the Senate and the president put together. The Supreme Court’s intervention in the proceedings of one of the National Assembly’s many committees should not have been made to appear as a challenge to the authority of parliament, much less to its non-existent supremacy.

kunwaridris@hotmail.com

THE British premier Gordon Brown would prefer Europe not to exist. If he had his way, politics would be played out in Britain, the transatlantic relationship and — his current unfortunate conceit — the world.

These are the chosen stages, real or delusional, on which the prime minister moves with assurance and a politically dangerous degree of hubris.

Europe, for him, is a sideshow by comparison, a distraction and worse, because in his mind it brings only penalties, not rewards. Not only would Brown prefer not to think about Europe; he would also prefer us to pretend that he does not think about it.

Yet think about it he must. The events of the week remind both the British and him of the extent to which this Europe-free vision is a piece of political escapism. As the economic crisis begins to settle into a way of life rather than an adrenalin rush, Europe is emerging through the fog as the international forum in which Britain’s economic fate — and Brown’s political fate — will be most decisively shaped in 2009.

With the pound falling to parity with the euro and an emerging strategic division between Britain and Germany, the events that matter are Brown’s Merkel-less talks with Barroso and Sarkozy in London, the economic summit in Brussels and the climate change talks in Poznan. Compared with these, the rest is grandstanding.

These are defining times not just for Europe’s economies but also for the shape, if any, of the European project that the next generation will inherit. This is fact, not opinion. Regardless of whether they are members of the eurozone or even of the EU, the simple reality is that unless Europe’s national economies coordinate their responses to the global downturn, they risk inflicting serious collective self-harm.

The degree of Europe’s economic, political and legal integration is now so great, the mutual dependence as trade partners so profound, and the collective European share of the global economy so large, that European agreement is as vital in the current emergency as disagreement would be destructive.

This is the far-from-ideal context in which events such as this week’s serious divisions with Germany, and the prospective second Irish referendum, should be understood. Europeans live in the Europe they have made for themselves, not in the Europe that they would like (or, in Brown’s case, would not like) to inhabit. Midway through his life-enhancing London stand-up show about the history of everything, Eddie Izzard says something that illuminates why this matters. He tells his audience that human beings never really needed the Ten Commandments in the first place. Actually, we only needed one commandment — to do as you would be done by; and perhaps a second — to remember that what goes around comes around.

The controversial Newsweek interview with the German finance minister Peer Steinbruck exemplifies how, in politics, what goes around always comes around. In the interview, Steinbruck laments the “breathtaking” policy switch that some governments, including Brown’s, have made “from decades of supply-side politics all the way to a crass Keynesianism”. His exasperation calls to mind the old communist jibe against errant comrades who were only ever on the party line while they were crossing it from right to left and back again.

What is needed instead is “a little steadiness and continuity”, says the man who is, lest we forget, the single most important finance minister in Europe.

Ordinarily that would be right and, even in today’s circumstances, Steinbruck has a point. After all, it’s not the German economic and social model that has suddenly come apart at the seams, but the UK’s. I’m aware that those of us who like and admire Germany need to be specially vigilant to also bear witness to Germany’s failings and limitations — which not only exist but have been inadequately addressed by successive German governments.

Not surprisingly, it is to German taxpayers that Europe’s more feckless governments, like Italy, are now turning to bail them out of their difficulties.

And when Brown and the other critics point to Germany’s much higher level of structural unemployment than in the UK for example, with the implication that Britain has been more dynamic in getting its citizens off welfare and into work, let them also remember that only Germany has had to absorb an economically shattered country — the old East Germany — into its borders. If Britain had been faced with 16 million new East British citizens over the past 20 years, the Brown boom might not have been as large as it was, or have lasted as long as it did.

It must be hard for Germans to take lectures from Brown. For more than 11 years he has descended on continental Europe for brief visits — always luridly well-trailed in the British tabloid press — in which he has lost no opportunity to lecture Germany from the free-market right about the shortcomings of its social market economic model. Now, with no word of apology, he is lecturing them again, this time from the diametrically opposite statist left.

— The Guardian, London