Tuesday, December 07, 2010

Warteg, tax, and vulgar paternalism

What is tax for? Revenue generation for public good provision, incentive mechanism to discourage certain consumption, or wealth redistribution. When you work and make money you use resources. Some you buy some you borrow. For warteg (street vendor selling food), space or street light might qualify as public good provided by the government. Tax in this case also filters out the inefficient ones; maybe by forcing some too small ones to merge and hence able to afford paying the tax. Or, maybe it is simply fair: you tax bajaj driver, why not warteg? So, yes, there are arguments for taxing the wartegs.

But, some politicians go too far. The chief of Democrat Party says wartegs have to be "nurtured and supervised". What the heck? Nurtured and supervised by whom? By the government? Parliament? You? Do you even think you're smarter than them the warteg sellers, so you should teach them how to make money? Do you realize that by issuing some regulation to "nurture and supervise" the wartegs you basically provide a room for yet another rent-seeking activity? Is tax not good enough?

1 comment:

  1. Couldn't agree more..

    Tax was used supposedly to transfer wealth from "the have" to "the have not"..

    This silly idea of taxing Warteg will seriously crippling the low income people,..

    I cant find even a single reason of how our politician can justify such thought..

    The Evolutionary Economists