[543] Of unfair tax regime

Last week in the Wall Street Journal, I read a page paid by Advanced Micro Devices, Inc. of the microprocessor company’s intention of suing Intel. AMD alleges that Intel has been divulging in unfair competition. Just yesterday, I read an article in Malaysia’s The Star about the oncoming litigation. Just for the record, I’m a huge fan of AMD and I think neophytes are usually misinformed whenever they choose Intel over AMD whereas AMD’s chips offer on par performance along with cheaper price.

Though AMD accuses Intel of forcing computers assemblers such as Dell to exclusively use Intel chip, I can’t help but wonder, do we punish those that are successful?

While AMD is pursuing its course, the European Union is investigation the matter too. And, as the event unfolds, Microsoft has already been under heavy scrutiny for a long time now.

I do understand how efficiency depends so much on free market where monopoly or near-monopoly is absence. Yet, do we need to punish those that monopolize the market just because they are good are running their business?

The idea of punishing the successful doesn’t end there. The popular progressive tax regime is another instance where the successful is penalized. In this regime, those in higher income bracket pay more taxes compare to others that sit in the lower level. Why do those that earn more have to pay extra tax?

When I was in the Malay College, the administration applied such idea to tuition fee. Though I’m not sure how it was done, I have a strong suspicion that in total, those that come from well-to-do family will be charged higher fee while those that lower income is charged with cheaper tuition. At the same time, aid from the government is similar in amount regardless of families’ income. In this analysis, other forms of scholarship are ignored in order to make all things the same.

Now, I have no qualm if all is charged the same amount with aids differ according to socio-economic standing. Though I have reservation for welfare-state, given the system is hard to change in the short term, I don’t mind if those that come from lower income families receive higher aid and then pay less fraction (fraction is the total subtracted with government aid) of their total tuition fee, or no fee at all for that matter in comparison to those that come from higher income bracket families with, take note, all paying the same total, not fraction, tuition fee, with or without aid. If this is the came, I really don’t mind the less fortunate pay less. What I do mind however is why the well-to-dos need to pay more total, not fraction, fee.

Against that, with or without aid, those with higher affluent were forced to pay higher sum. Needless to say, with higher fee, the fraction that they pay is higher. As a side note, a flat tax-rate regime is far simpler to deal with; it saves time and money; takes less form to fill in and more importantly, saves more trees. w00t! (again, it’s pronounced as “woohoo”, never “woot”. It’s woohoo in l33t form. Now, l33t user might be retarded and lame but if you want to be retarded and lame, use it properly. Goddamn please)

Perhaps in the case of Intel and Microsoft, it’s comprehendible to see why the cases deserve the attention they get from anti-trust law due to the fact that both firms apply excessive pressure against others. After all, it seems, it doesn’t take an economic major these days to see why competition-based market is better than a market with one player. But, what about the progressive tax regime or anything that resembles it?

I’ve heard some argue that those that are richer need more security for their holding. Since the government is the de facto protector of these capitals, the government has the right to charge higher tax to perform that task of protecting more private property.

Really, if that is the case, shouldn’t the rich get more votes because they are richer? I mean, the rich should have more say since the government is representing all including the rich and there is more capital on the hand of the rich.

I don’t know about you but that is merely legalizing bribery and the vote argument should be flawed. And if that vote argument flawed, so too should the protection argument. And I’ve just committed a logical fallacy. Do you see where it is?

In any case, it is my opinion that the government uses the progressive tax regime as a source of securing the welfare of less fortunate citizens. In short, it’s just a reason to keep huge welfare programs afloat. Think Robin Hood.

Though the intention is noble, it’s unfair. I don’t agree with wasteful welfare programs but if the government wants it done, there are other ways to fund such program. One is employing fewer civil servants and shoo away any redundant post. Second, cut unnecessary subsidy, like oil subsidy for instance. Third, curb corruption. Hell, in Indonesia, aid worth a few millions dollar for the tsunami victims is gone due to corruption.

So, never trust progressive tax-rate regime and much less the government with your money. In order to do that, we need to strive for a smaller government. We need to persuade the government to charge (cough, steal) us less tax in order to make it smaller and ultimately it out of our bedroom.

p/s – Malaysia Airlines sucks. When the counter says for check-in without luggage, only those that want to check-in without luggage should be there and Malaysia Airlines should allow only those without luggage to be there checking-in. Instead, what happened was that there were loci of retards with huge bags lining up there. Worse, this occurred when there were, I approximate, 200 persons lining up, waiting time worth an hour or two I presume. I am only glad that I didn’t have to experience my presumption that day.

I wanted to say something to these uneducated mobs but I realized, complaining to a mob is anything but smart. So I approached a representative from the airlines and guess where they directed me to?

First-class counter and everything was done in less than 10 minutes. I’m free good about coming out and complained since it saved me a lot of time. Yet, here is to Malaysia Airlines- do it properly. Tell your representatives to tell your customers to check-in at respective counters, not every counter.

Well, I’d suppose, at least they lined up. Thank goodness for that.