Justice in taxation?

The first rebellions in Anatolia were those against tax injustice. Throughout history, the world has witnessed the desperation, cries, and occasional uprisings of people crushed under the weight of unfair, arbitrary, and unjust taxes.

Once upon a time, taxes were imposed arbitrarily without the consent of the citizens. The people cried out that there should be 'no taxation without representation.' This outcry was the voice of the people. Despotic regimes could not withstand the public, and thus, the struggle of the people prevailed.

This was a victory for freedom and democracy. Justice in taxation is a prerequisite for the right to the budget, and consequently, for democracy and the democratic state of law.

According to Article 73 of our Constitution, everyone is obligated to pay taxes according to their financial capacity to meet public expenditures.

The fair and balanced distribution of the tax burden is the social objective of fiscal policy and the primary duty of the state.

For there to be justice in taxation, everyone must pay taxes in proportion to their power, that is, their strength. There are three ways to ensure that the ability to pay is fair and balanced.

Progressivity; that is, taxing those who earn more at a higher rate and those who earn less at a lower rate. However, this situation works in reverse in our country. Those who earn less are taxed more, and those who earn more are taxed less. How, you ask? Highly profitable companies pay less tax through exemptions, exceptions, investment allowances, export incentives, tax expenditures, and tax amnesties that are issued every year or year and a half.

They also use the taxes they do not pay as interest-free loans until the next tax amnesty.. In our country, wage earners and employees pay 56% of income tax through the withholding method at the source, without any loss or evasion, by the 26th of the following month. However, companies pay their income tax 15 months later. Moreover, considering that tax evasion in our country is higher than tax revenue, it becomes clear that tax justice is in a dire state for wage earners.

Income tax is progressive for those living on their labor, and it is also progressive for commercial companies. This situation creates an unfair structure for employees. The first bracket of income tax is 15%, the second is 20%, the third is 27%, the fourth is 35%, and the fifth is 40%.

The corporate tax rate for companies is 25%. The second principle in ensuring tax justice is the principle of separation. This means that labor income and capital income should be taxed differently. This implies that while labor income should be taxed at a lower rate and capital income at a higher rate, the exact opposite is being applied. Wage earners receiving the lowest wages enter the 20% bracket from the 15% bracket by the end of the 5th month. For this reason, there is a decrease of nearly two thousand TL in their wages starting from the 6th month.

When taxing employees in terms of income tax, a flat rate should be applied rather than a progressive rate. This flat rate should be 10%. In this case, tax justice will be partially achieved for wage earners.

The third method for ensuring tax justice is the minimum living allowance (special deduction); unfortunately, this practice was abolished by the government two years ago. It refers to the portion of a person's income sufficient for themselves and their family remaining tax-free. We used to implement this as a special deduction.

Normally, in a democratic state governed by the rule of law, another element is the distinction between indirect and direct taxes. Indirect taxes are collected from expenditures, while direct taxes are collected from income. If indirect taxes are high in a country, then taxation in that country is unjust. In our country, indirect taxes account for 75% of the total, while direct taxes account for 25%.

The poor population pays 75% of the taxes. However, in the European Union, indirect taxes are 25% and direct taxes are 75%.