The first is how powerful vested interests easily find takers to carry their flag in the public battles that characterise tax reform. Small and determined minorities can hold the entire economy hostage simply by refusing to budge and preventing the passage of key legislation. Look at the example of the MQM during the effort to pass the reformed general sales tax at the end of 2010, or the influence of the Punjab shopkeeper associations over Nawaz Sharif and his party men on the same issue.
For all the craziness, the Tea Party fringe in America is in fact fronting for very powerful vested interests who do not wish to pay up if they don’t have to. To beat these interests, it is necessary to unmask them, to show their face to the public. Look past the specific words and the mouths from which such words coming, to the puppeteers behind the show. Our successive leaderships have not been able to do this because they share the same puppeteers and if they don’t, they prefer to compete with each other for the puppeteer’s favours rather than move to end the racket.
The second major similarity is in how a fiscal stimulus ends up being appropriated by the rich. Austerity for the masses and stimulus for the rich gets you riots in the streets like the ones in London. “We’re taking our taxes back,” one rioter was quoted as saying. When people see the government shelling out billions to rich and powerful interests by rescuing the banks, they’re not very likely to give a sympathetic hearing to calls for austerity and taxes.
Look for instance at how bank loan write-offs get dragged into the debate on tax reform here. The story gets cast something like this: ‘The government writes-off billions of rupees of loans for sugar mill barons and companies run by sons of politicians, but all that the poor get is taxes and inflation.’ It’s a powerful and compelling story and, in many instances, it’s also true. How do you argue the systemic importance of deficit reduction against a simple and powerful story of this sort?
Third and perhaps most importantly, you’ve got to have a bad guy, a villain, an archetypal representation of the ‘all that ails us’ variety. In America, the conservative establishment has built two villains for itself, and spent generations flogging them in public.
For the fiscal conservatives the villain is big government, bloated and ineffectual, coddling a worthless rabble of an underclass — often portrayed in racist language to add to the villainy of it all — strangling the innovative spirit of adventure and enterprise that has animated America and made it the master of the world’s destiny. For the cultural conservatives the villain is gays, embodying all the sins of indulgence that are dragging America down. The reformers have no villain, no bad guy, and therefore they have no story that anybody wants to hear. In Pakistan, for instance, the opponents of reform have a villain, and it’s name is ‘corruption.’ “End corruption first, then ask the people for taxes” declared Ahsan Iqbal of the PML-N once in a television programme with me. And with that simple phrase, that magic bullet, I knew he had the viewers. No amount of explaining the complexities and urgency of tax reform would work after that.
So here’s the lesson from Pakistan about how reform efforts fail more often than not. Reforms that require mass participation like in the case of taxation cannot succeed if the masses do not understand why they are being asked to participate and cannot empathise with the system that the reformer claims he or she is trying to rescue. To get this understanding, you’ve got to wrap the whole effort up inside a story and personify the elements of the story. Failure to do this will mean that the optics of the whole affair will always be controlled by the opposition, which will hold the effort hostage simply because it doesn’t have to own the consequences of failure.
Published in The Express Tribune, August 18th, 2011.
COMMENTS (6)
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Even in my country India like elsewhere there are vested interests that either stall change or force it. Today some of the Businessmen have become so rich they can buy and put into their pockets not just the Politicians from all parties but the Media too. The people may be disillusioned but are very confident that in a democratic set up they will triumph. The citizens must realize that without agitation nothing will change. A non violent protest or mass fast is a potent weapon and must be used to bring the rulers to heel. It is essential that the people must take in lead in taking the country towards fulfilling their aspirations. A merit based society rather than a mama chacha culture stands a better chance of taking the country towards its goals.
@Khurram: Excellent piece. It seems everyone has got some excuse (read villain) even to pursue matters which are harmful to the society.
@Mirza: your comment was spot on. Corrpution has always been part of our society. With current government we are simply looking its new dimensions and peaks.
Khurram, you are spot on. Pakistan is being held hostage by people with vested interests. They do not realize the challenges they will face if they ever come into power. Similarly, corruption is something which just cant be proved or eliminated through mere rhetoric. When Ahsan Iqbal said that corruption be ended, he was effectively telling his constituents that you dont need to pay tax as corruption will never end.
One of the best articles that I read in a long time. Thanks a lot. I have been seeing the transfer of money from poor to the rich for the past couple of decades in the US. The richest man in the US (Warren Buffett) according to his op ed in NY Times, has only paid 17% of his new income in taxes. While all his staff paid a much higher % of their income in taxes. Most of the evils in Pakistan have nothing to do with govt corruption, it is only an excuse to justify everything that is wrong. Mush, Zardari, Sharif, etc., did not tell to add water in milk, fake baby formula, fake drugs, inject people with Hep B and C contaminated injections, lie, cheat etc. This was happening before these rulers and would continue well after them. The corrupts in the country (most population I am afraid to say) have justification for everything from stealing water, electricity, bribes, with the excuse that the govt is corrupt. People like N. Sharif used to say that only if SC CJ is restored, all problems would be solved. Or only if Imran Khan comes to power! How would they bring about the change? Would they bring in angles from heavens? Unless the common Pakistani reform themselves and take responsibility, nobody from the top can change.
Very Nice ,But this thing started in Pakistan fist.So we should say it ''A Pakistani Tale in America''.