Conflict, Legitimacy and Government Reform: Equitable Allocation of ...
Conflict, Legitimacy and Government Reform: Equitable Allocation of ...
Conflict, Legitimacy and Government Reform: Equitable Allocation of ...
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52 KPI Congress XI<br />
A good taxation system must not have a huge impact on incentives,<br />
causing fund transfer or a person’s relocation to other countries where<br />
taxes are lower. The principle should be who needs to pay taxes must do<br />
so according to one’s status. Moreover, those receiving much benefits<br />
from public expenditure should be willing to pay taxes at a greater<br />
proportion <strong>of</strong> income, compared to those receiving less benefits. So, we<br />
should pay attention to acceptable, fair allocation <strong>of</strong> tax burden.<br />
(Harberger, 1974: 259) Regarding this issue, a progressive taxation<br />
system (a person with higher income pays a higher percentage <strong>of</strong> income<br />
but taxes should not be too high <strong>and</strong> de-motivate) combined with public<br />
expenditure that benefit everyone should be a primary goal. At the same<br />
time, taxation system should include measures that force those with<br />
excessive wealth to utilize their assets to generate benefits (help increase<br />
productivity <strong>and</strong> employment), not hoarding them for speculation.<br />
Do fiscal policies <strong>of</strong> Thail<strong>and</strong> support the poor?<br />
Taxation system: We must consider both taxation system <strong>and</strong><br />
public expenditure.<br />
Direct <strong>and</strong> indirect taxes are government’s main revenue sources.<br />
Direct taxes are collected from individuals according to income <strong>and</strong> asset<br />
bases, for example, personal income tax, corporate income tax, property<br />
tax <strong>and</strong> inheritance tax (the latter two types are not prominent in our<br />
country). Most indirect taxes are imposed on various products, such as<br />
value-added tax, excise tax, oil tax <strong>and</strong> custom duty, <strong>and</strong> collected when<br />
spending is made on purchase <strong>of</strong> such product.<br />
In Thail<strong>and</strong>, personal income tax is progressive, that is, those with<br />
high income pay a higher tax rate than those with less income; but<br />
corporate income tax is the same rate for everyone.<br />
Indirect taxes are collected from everyone at the same rate, no<br />
matter whether incomes are different or not. In this case, “a poor<br />
household may take a heavier tax burden (compared to income) because<br />
the ratio <strong>of</strong> consumption (C) per income (Y) <strong>of</strong> poor household is higher<br />
than rich household.” (TDRI, 1999: 1, footnote 1) Therefore, the real