"… but in this world nothing can be said to be certain, except death and taxes” –  Benjamin Franklin, 1789. This famous quote was actually lifted by Franklin from Christopher Bullock’s play The Cobler of Preston, 74 years earlier.

Taxes have been levied by rulers from the dawn of history in different cultures in every corner of the earth. In the past taxes were largely imposed and collected by coercive means. Tax collectors and rulers, whose lifestyle the taxes maintained, invariably had blood on their hands. As we became more civilised we rationalised the need for tax collection and massaged the concept to fit our world view. A world view based on the premise that the world was a just place and that good prevailed and was our ultimate destiny. Taxation had therefore to be a good thing and we developed characteristics that suited this ideal.

A tax system, therefore, needs to be equitable, adequately fund government's spending, impartial, reasonable, simple in its application, proportional to the taxpayer's ability to pay, certain, elastic and flexible, cost of collection to be lower than the revenue collected, diverse and broadly spread, consistent with government policy and (this is the one I like best) convenient to the taxpayer.

Lofty ideals indeed. Good luck with that!

We would all like taxes to be as low as possible, certainly much lower than they are in most European countries. This is our wish. We also elect governments that pass high taxation into law and impose its collection by ultimately coercive means. A somewhat perplexing state of affairs. Between our wishes and what ultimately ends up as law we appear to have lost the plot. Power to the people. Good luck with that too!

We elect governments to administer tax monies in order that these funds are used for our common good. The popular expectation, however, is that the funds are mostly used to the taxpayers' own advantage and benefit and only marginally to other more philanthropic ends (meaning other people). A substantial departure from this objective makes people unhappy. As people see that this equation is not really balancing out for them they strive to re-establish the balance by minimising their tax burden and/or maximising their benefit. This is a diabolical mix of tax evasion and benefit abuse.

Additionally in the tax collection system we have civil servants who get maximum benefit out of taxation as it pays their salary, engaged in controlling and collecting tax from reluctant taxpayers for whom the equation is not quite balancing out. On the other hand another group of civil servants are engaged in dispensing benefits and controlling benefit abuse. I suppose at a stretch the benefit abusers may be feeling hard done by as civil servants are seen to benefit more from tax revenue than themselves. Hence, the effort by benefit abusers to restore the balance.

Human nature appears to aim at outcomes that skew the cost-benefit ratio in the direction of an ever-increasing benefit.

Politicians need to be voted into government, or at least into parliament, in order achieve any goal. They are therefore necessarily held at ransom by votes. This predicament is at once the hallmark and the Achilles heel of democracy. The taxpayer/voter will cast his vote in favour of that politician who is as able and willing to meet the voter's expectation of maximum benefit from tax monies and minimum contribution. Another way of putting this is to say that citizens will vote for the politician who promises them prosperity. The most direct way in which this is done is the dishing out of benefits and handouts. Politicians have to do this as otherwise they are not elected and are of no consequence. Ha!

Year after year budgets are inflated with largely unnecessary costs incurred to essentially buy votes from a greedy and grabby electorate. Add the spice of competing political parties and you can immediately see the multiplier effect in action and how quickly budgets and deficits can spin out of control. Political parties play poker with our tax money bluffing and raising the stakes beyond what the country can afford – a game of brinkmanship. Benefits, once given, cannot be taken back as votes need not only be gained but also kept. In such a situation government expenditure must increase year on year. The tax collected is never enough as deficits are needed to fund votes.

One might say c'est la vie if it were not for the fact nothing grows forever and tax revenues are not an exception. This has been pointed out to us by the IMF recently. The politics of brinkmanship can easily lead to the economics of poverty.

Clearly this ultimately destructive cycle must be broken. Government should be minimalistic where the private sector can do the job and totally involved where it matters. The cost of government must go down. The size of our parliament and local councils must be reduced. A serious review should be carried out of all government’s costs and especially of  wages.

We also badly need an honest calculation of what the EU is directly or indirectly costing us, including the cost of the army of administrators and professionals employed by government for Malta to deal with all EU matters. The country deserves to know this.

We collect an odd €2,650,000,000 in taxes, licenses, duties and contributions. I ask, how on earth can this not be enough to run this small country?

Taxation rates are going down across the EU as countries have finally realised that this is the only way in which a real and immediate boost can be given to the economy. There of course are notable exceptions, such as France, where a suicidal government is still pandering to benefit a crazed electorate. The race that is lowering tax rates is on and Malta must not only catch up but also lead if we are to be successful in creating jobs for our youth and the increasing unemployed.

David Marinelli is CEO of Portman International, a European Financial Services Group