Taxation Vs Privacy

If you own a piece of land, the State government wants to know. Why? Because you expect the government to enforce your exclusive right to occupy or let that land. Moreover, as the total supply of land is fixed, it is a matter of public interest that you are depriving other people of a certain part of that supply. Fair enough.

If you claim a patent on an idea, the Federal government wants to know. Why? Because you expect the government to protect your exclusive right to profit from that idea, and because it is a matter of public interest that other people cannot use that idea without your permission. Fair enough.

But if you bake a loaf of bread and sell it, the Federal government still wants to know. Why? You’re not claiming an exclusive right to bake bread. The supply of bread isn’t fixed. You’re not taking bread from anyone else. So why should the government want to know what you’re doing? Because it wants to tax you for it!

And if you hire someone to help you bake the bread, the State and Federal governments want to know. Why? You’re not claiming an exclusive right to hire workers. You’re not even claiming an exclusive right to hire that worker. So why should two governments want to know what you’re doing? Because the State wants to tax you for hiring and the Commonwealth wants to tax the worker for working!

We think this has got out of hand. As long as you’re not hurting anyone else, there’s no need for Big Brother to know what you sell or whom you hire or whom you work for. To avoid invading your privacy in the name of taxation, governments should tax you only on things they need to know about anyway — things like the land you own and the patents you hold.

Otherwise we say your business is… your business.

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https://prosper.org.au/2006/02/10/taxation-vc-privacy/