Taxation without representation, or Talking to the Taxman
about Poetry [1]
-- Vasuki Nesiah
Worrying about economic democracy viz. taxation policy in the
face of a whole range of other brutalities gripping the lives
of people in the North and East may seem akin to Nero fiddling
when Rome was burning. Against the backdrop of this scale of
human suffering (child recruitment, political killings, harassment
of Muslims etc.), some may ask if we should in fact spend time
and energy addressing the distributive inequities and democratic
deficits that enables and accompanies tax collection (be it by
the LTTE or the GOSL).
In response, I would argue that taxation personifies how a population
that has already suffered so much is being bled even further in
every pore of its being; it speaks to the pervasive and omnipresent
control that is exerted over all dimensions of its life – not
only the ‘flagship’ human rights abuses that are unfolded against
dissenters and political outcastes, but also all individual and
collective [2] efforts to feed mouths and make
ends meet - the ‘poetry’ we may say of survival against the odds.
Notwithstanding LTTE rationalization of the tax system in the
name of the nation, the tax collector’s call has bred an incremental
tax revolt of sorts – a host of mini-mutinies expressing resentment
and resistance to burdens on already beleaguered conditions of
survival. In this context, killings, torture, hostage taking
and other kinds of abuse have proved necessary arsenal to ‘persuade’
people to contribute to their best interests (hence ‘extortion’
is actually a more accurate term – but more on the cynicisms and
mythologies of nomenclature later).
However, that in itself is not the whole story – even if tax
collection did not require violent coercion, even if our priority
concerns were “child recruitment, political killings, harassment
of Muslims” etc., we still cannot avoid addressing taxation.
There are deep and inextricable linkages between what some may
(problematically
[3] ) classify as ‘ordinary’ violence (such as the
distributive inequities that inhere in current tax collection
policies and practices) and ‘extra-ordinary violence (such as
killings and other incidents that may be conventionally highlighted
as gross human rights violations). On the one hand, both these
different forms of brutality are enabled by an authoritarian stranglehold
on civil society, political institutions and the economic status
quo; Equally, the authoritarian system is itself reinforced and
reproduced in different ways by both pervasive extortion and targeted
killings, by routinized, day-to-day tax collection as well as
periodic surges in child recruitment, by normalized inequities
and the persecution of minorities. Moreover, both these ‘forms’
of brutality have a mutually reinforcing dynamic. For instance,
the long reach of terror regarding incidents such as child recruitment
have served to massage the fears and compliances that accompany
tax payments where some families have made donations in efforts
to ward off child recruitment. Similarly, the inequities that
are normalized by regressive tax policies and other distributive
injustices sow the ideological ground legitimizing persecution
of the politically and economically marginalized [4] . In sum, whether
analyzed or experienced as ‘ordinary’ violence or ‘extra-ordinary’
violence, both ‘forms’ of violence are mutually reinforcing symptoms
of an authoritarian dispensation. Thus concern with one form
necessarily entails concern with the other [5] .
Trajectories of LTTE and GOSL extortion
Ironically, one of the most striking elements of the current
LTTE tax policy [6] is its uncanny resonance with that of Regaining
Sri Lanka [7]
– the World Bank PRSP for Sri Lanka that is likely
to shape the post-election GOSL policy irrespective of whether
the government is formed by the PA or the UNFP [8] . In fact significant components of Regaining
Sri Lanka have already been pushed through by the GOSL in
fast track legislative processes. The parallel between the LTTE
and GOSL tax regimes lies not in the specific economic theory
informing the taxation policies of each, but in that both approaches
reflect taxation without democratic accountability – while the
full anti-democratic character of their current economic policies
may not be equivalent, their historical record leaves a parallel
blood trail. Interestingly, many commentators refer to the LTTE
regime as extortion while there is almost uniform reference of
the Regaining Sri Lanka regime as taxation, with its tax
policy is presented as merely a technical question to be assimilated
into routinized governance in the interests of the governed.
This editorial speaks of both, the LTTE program and the Regaining
Sri Lanka program, as taxation. In doing so it runs the risk
of casting some unwarranted legitimacy on the LTTE regime. However,
to the extent that the term extortion may emphasize the coercive
aspect of the LTTE program and under emphasize its distributive
inequities, I made the calculated decision to stay with the term
taxation. Moreover, the hope is that the nomenclature of taxation
will help emphasize resonances with the Regaining Sri Lanka
regime whose analogous policies are most commonly discussed
through the language of taxation. Equally, in emphasizing those
resonances, the hope is that it will also allow us to expose Regaining
Sri Lanka as a program of extortion that is indeed analogous
in critical respects to the LTTE system.
The nomenclature through which tax policy is shaped is a telling
indicator of the ideological investment of different policies.
For instance, in the political vocabulary of Regaining Sri
Lanka, corporate tax holidays are described as merely a question
of “removing barriers” to the market, on the other hand, welfare
states that tax to transfer resources through social programs
for the vulnerable are said to be conduits for rent seeking activities
fostering corruption and inefficiency. A genealogy of the term
taxation suggests that what is corruption and what is taxation,
what is corporate welfare and what is the removal of inefficiencies
is of course not ethically pre-ordained - rather, these are ideological
placeholders that are mobilized to normalize one arrangement and
contest another; in this case the effort to claw back the welfare
state as a cesspool of corruption, functions to legitimize corporate
welfare and subsidies to the rich in the name of good governance
and the rule of law. Similarly, the LTTE also often uses terms
such as ’donations’ to describe the approximately 3 billion rupee
revenue it acquires locally
[9] – many reluctant “tax payers” have had to not
only give up money, but also sign forms describing what they have
coughed up as ‘donations’ to the cause. Equally, the LTTE is
also interested in legitimizing resource extraction – be it through
hostages and ransom notes, payments at check-points, routinized
levies on individuals and businesses in the area etc. – as the
legitimate functions of a state; in this context it advances the
language of taxation in relation to the protection of widows and
orphans and so on. In this case the normalization of these levies
is also an effort to plant a flag, claim a territory, and govern
a people… where legitimacy is aspired to by having tax collection
as a substitute for representation!
In a recent critique of Regaining Sri Lanka’s anti-democratic
character, the Forum for Democratizing Development describe ‘economic
democracy’ in ways that are relevant to this discussion of LTTE
tax policy and democratic legitimacy. Arguing that Regaining
Sri Lanka abdicates economic democracy, it argues that “A
commitment to economic democracy” calls for a dual focus on both
the substantive goals of economic policy (i.e., a focus on policies
that seek core human security and opportunity for those most economically
and politically marginalized), as well as on a transparent and
participatory “the policy making process” (i.e., a process that
is accountable to those most affected). Taking this approach
as our own entry point into the analysis of the LTTE taxation
regime in the North and East, the LTTE policy and practice of
tax collection emerges as deeply undemocratic in regard to both
substance and process – in regard to 1. The regressive impact
in the distribution of tax burdens [10] , as well as 2. The willingness
to advance such policies while shielding the policy making process
from democratic input by those most affected
[11] .
Regressive impacts: Exacerbating vulnerabilities
Let me elaborate on each of these in turn. First the regressive
character of LTTE policy, including the exacerbation of existing
inequalities. Some of the loudest critics of LTTE taxes may be
traders and other commercial enterprises, what remains of the
middleclass in the North and East, and development NGOs and so
on. Yet these voices may suggest a misleading impact of where
the taxes hit hardest. LTTE taxes burden rehabilitation efforts
rebuilding homes, schools and other infrastructure and de-mining
efforts clearing affected areas
[12] . LTTE taxes are also imposed on CBOs, welfare
recipients [13] , IDPs
[14] , and others who can barely sustain even a subsistence
existence. In fact, if we look at the impact of taxes on the
relative vulnerability of different sectors, the most marginalized
and politically disempowered communities are precisely those whose
vulnerability is also most heightened by these taxes. Firstly,
the larger traders, contractors and others pass on the tax burden
imposed on them by the LTTE to consumers – thus these tax burdens
function as the most regressive of consumer taxes; Moreover, the
LTTE taxes farmers, fisher folk, small shop owners and others
irrespective of income
[15] . Undoubtedly, traders, large NGOs and the middle
class also suffer the burden of these taxes. However the impact
of taxes are most acute for economically and politically marginalized
communities who are most dependent on CBO development initiatives
that are deterred from operating in the area because of LTTE taxation;
those dependent on welfare rations and such who have a significant
portion of their rations appropriated by the LTTE; for those returning
IDPs who don’t have private funds and are most dependent on rehabilitation
schemes and demining efforts that are deterred by extortion activities;
for those most dependent on public services who have to face the
large scale exodus from the region of public servants because
of taxes on school teachers, health service workers and others [16] ; for the poor at large who will
be most hit by the generally higher prices of staple goods that
result from tax burdens passed on by traders to consumers.
The regressive impact of tax collection by the LTTE and the Regaining
Sri Lanka proposal is exacerbated through how those revenues are
spent – i.e., what w may call ‘reverse-RobinHoodism’. The Regaining
Sri Lanka program exacerbates the vulnerability of the most
vulnerable through proposed taxes on the consumption of necessities
such as water, and equally critical, passes on burdens from the
wealthy to the most vulnerable through large scale tax hand-outs
to corporate interests. Certainly in the history of the GOSL
(particularly in many of the post-77 initiatives), rather than
designing a tax regime on the basis of accountable and socially
responsible policy rationales, tax havens have been manipulated
and deployed to lubricate political corruption and nurture political
patronage of powerful special interests. This is the record of
the GOSL whether controlled by the UNP or the PA. The LTTE is
engaged in a similar diversion of funds collected off the backs
of the poor to serve interests that are not accountable to them;
the latest Pongu Thamil in Vavuniya offers a case in point where
over the Vavuniya cooperative was taxed over Rs. 150 thousand
rupees to fund Pongu Thamil celebrations there
[17] . Just as Regaining Sri Lanka may be widely
recognized as designed to service corporate interests and those
with access to the upper echelons of whichever party machinery
will control GOSL, there is wide recognition that the winners
of the LTTE taxation system is the LTTE machinery. Taxation (including
the use of tax monies to arm, feed and clothe the LTTE) is a policy
that the LTTE and its supporters publicly defend on the rationale
that the money is used “to protect” the taxpayer’s “motherland
and provide services to the public.” [18] . Of course, the public services
of the North and East, from schooling to health care, remain funded
(perhaps reluctantly) by the GOSL so it is unclear what public
services the LTTE provides; in fact, noted in the paper presented
by Sarvanthan that was cited earlier, those public services have
actually been hurt by the taxation policy because public servants
have refused employment in the North and East as a result of the
LTTE’s policy of appropriating portions of their salary.
Anti-democratic Processes: Taxing dissent
The resonance in the distributively regressive character of the
LTTE system and the system proposed in Regaining Sri Lanka
suggests that poor Tamils who may have expected the ‘Tamil’ leadership
to correct the injustices and inequities of the Lankan state will
remain economically disenfranchised even under a ‘Tamil’ dispensation.
The depth of this ‘disenfranchisement’ is underscored if we turn
to the second aspect of economic democracy noted above, namely
a policy making process that manifests a deep antipathy to democratic
accountability. If marginalized Tamils had little input into
the Regaining Sri Lanka process (which was equally unreceptive
to marginalized Sinhalese)
[19] , the LTTE’s approach is even more deeply undemocratic
in its hostility to any semblance of accountability. Obviously
the LTTE program is indeed taxation without electoral representation.
In addition, it fails through other avenues to democratic participation
as well. In fact, interestingly the escalation of the LTTE’s
rent seeking policies, is coupled with an ever strident insistence
on sole-representation – not only the representation of ‘Tamil’
interests to the world at large, but also the sole authority to
determine what in fact, constitutes the best interests of Tamils.
With taxation presented as a contribution to the ‘motherland’,
to question the LTTE’s tax policy is, then, a betrayal of the
motherland; it can be the fatal sign of a ‘traitor’. Thus the
tax policy itself is barricaded against all input. In fact in
many cases it has been used to extend and entrench its grip on
civil society – thus NGOs have to negotiate in advance with the
LTTE if they are bringing any resources into the North and East;
as reiterated on TamilNet on the first of this year, it is the
LTTE’s stated policy that Government departments and NGOs that
do not do talk to the LTTE in advance will face particularly hard
‘taxation.’ In fact these dynamics can build on themselves.
Thus taxes have been used to punish political dissent [20] ; in other cases taxes have been
used to further the interests of those invested in harassment
of Muslims, and the exclusion of Muslim traders from a particular
region. Across the board what remains true is that those most
hurt by the LTTE taxation policy had nothing to do with its formulation,
and as borne out in Amnesty International reports of cases of
abduction and harassment, those who protest the policy will be
penalized in no uncertain terms.
W(h)ither representation?
None of the above is new - we all know and condemn taxing the
poor to subsidize the rich, fleecing the public to service special
interests (from corporate interests to Anti-Muslim interests),
taxation at the barrel of the gun and so on. That said, it is
still important to make the linkages between areas such as taxation,
and the vision of democracy and distributive justice that is both
implicit and explicit in the policies and practices that follow.
Yet how do we approach the question of representation in these
contexts – what would make a particular tax policy more or less
democratically legitimate? The American revolutionaries making
the “taxation without representation” critique of Colonial Britain’s
economic policy in the 1760s were also making an argument for
electoral representation. In Sri Lanka, the up coming election
underscores the fact that the opportunity to choose a representative
through the ballot box can itself be a misleading test of democratic
accountability. We need to look at how the framework of choices
available to us may itself already proscribe other choices. For
instance, TNA’s accession to the LTTE as sole representative virtually
eliminates electoral choice in the North and East [21] . Similarly electoral
choices can be defeated by fundamentally ideological consensus
between electoral competitors who are mere turf rivals – for instance,
Sinhala chauvinism comes in different stripes but one way or another
it infuses the principle platform of both the PA and the UNF
[22] . Thus in both these cases any post-election
economic policy advanced by the winners will be fundamentally
compromised by the fact that electoral victory was earned through
such dramatically cramped electoral choices. Thus in this, as
in other cases, it is evident that, electoral tests cannot be
the sole indicators relevant for democratic legitimacy in economic
‘governance’ – democratic legitimacy can also come from a deeper
commitment to economic democracy in relation to both the substantive
meat of such policies, and the processes through which policy
making and implementation takes place. As discussed above the
LTTE policy, as much as the Regaining Sri Lanka program,
fundamentally eschews any such commitment. Those in our community
who have a commitment to democratic legitimacy in economic policy,
armed with realistic analysis and extraordinary aspirations, are
fundamentally challenging the current course of policy making
in Lanka - be it in Colombo or the Vanni.
[19] See People's Petition against "Regaining Sri Lanka"
on the website of MONLAR http://www.geocities.com/monlarslk/
In addition to this petition,
the MONLAR website also carries a detailed discussion of Regaining
Sri Lanka.
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