María Blanco, Carlos Rodríguez Braun and Luis Daniel Ávila
On 28 January 2021, the Rafael del Pino Foundation organised the live dialogue through www.frdelpino.es entitled "Hacienda somos todos" ("We are all the Treasury") in which María Blanco, Carlos Rodríguez Braun, Luis Daniel Ávila and Luis Alberto Iglesias (moderator) took part.
María Blanco holds a PhD in Economics and Business Administration from the Complutense University of Madrid and teaches History of Economic Thought at the CEU-San Pablo University. Her main research topic focuses on economic methodology, to which she devoted her doctoral thesis Debates on the role of mathematics as a research tool in economic analysisdirected by Carlos Rodríguez Braun, professor at the Complutense University of Madrid. Other areas of interest to which he devotes his research are economic analysis through literature, the role played by institutions in the history of economic thought in the 18th and 19th centuries, the School of Public Choice, the contribution of Evolutionary Psychology to the economic theories of the past and the reception of the theories of the School of Public Choice. The contribution of Evolutionary Psychology to the economic theories of the past together with the reception of the theories of the Austrian School in the United States constitute his current lines of research. He has participated in several privately funded research projects and has organised international conferences and seminars at the CEU-San Pablo University.
Carlos Rodríguez Braun is an expert in economic thought and liberalism with international recognition for his publications and conferences. This Spanish-Argentinean PhD in Economics is characterised by combining academic rigour with a desire to disseminate information. He is a member of the National Academy of Economic Sciences of Argentina and Professor of History of Economic Thought at the Complutense University of Madrid, and combines the publication of books and academic articles with collaboration with the written and audiovisual media. He is a reference and opinion maker on economic, political and social reality, as well as a defender of globalisation and liberalism. As a journalist, he has been director of España Económica and deputy director of Cambio 16 and of the television programme El Valor del Dinero on La2. He is currently a columnist for La Razón, Expansión, Libertad Digital and participates daily in Onda Cero Radio. He has published articles in prestigious journals such as History of Political Economy, American Journal of Economics and Sociology, European Journal of the History of Economic Thought or the Journal des Économistes et des Études Humaines, and he is also an evaluator and sits on the advisory boards of scientific publications in Spain and other countries.
Luis Daniel Ávila is Graduate in Journalism and Master's Degree in Economics from the Universidad Rey Juan Carlos. He has worked as a journalist and economic analyst. As a specialist in cultural economics, he has undertaken various initiatives to promote financial education among the creative community. He currently lives in Salzburg, where he combines the management of his art management company with the practice of a stoic and minimalist life dedicated to the dissemination of the principles of a free society.
On 28 January 2021, the Rafael del Pino Foundation organised an online dialogue entitled "Hacienda somos todos" ("We are all the Treasury"), with the participation of María Blanco, professor of History of Economic Thought at the CEU-San Pablo University; Carlos Rodríguez Braun, professor of History of Economic Thought at the Complutense University of Madrid, and Luis Daniel Ávila, communication consultant, audiovisual producer, photographer and graphic designer.
María Blanco began the dialogue by commenting that youtubers such as El Rubius go to tax shelters such as Andorra to protect themselves from the tax stones that are thrown at entrepreneurs.
Carlos Rodríguez Braun clarified that the term "tax haven" originated from a translation error. It comes from the English expression "tax haven". "Haven" means refuge, but someone confused it with "heaven", which means heaven. That is, a place where you go because you are being persecuted. Hence the mistake. There is also a misunderstanding on tax issues, because the authorities send the message that the only bad tax is the one you don't pay and, in this way, avoid the debate on the taxes you do pay. Tax havens, therefore, are a trick to divert attention.
Luis Daniel Ávila added that people like El Rubius are complying with who they have to comply with, which is with their families and with themselves. Furthermore, it is not forbidden for a person to move wherever they want, including Andorra. This reminds him of a phrase by Thomas Sowell, who did not understand why people who want to enjoy the money they have earned from their work and not those who want to live off other people's money are called greedy.
Rodríguez Braun reminds us that taxes must be paid because not to do so is to commit a crime. The question, therefore, is not whether to pay them or not, but why to pay them, since the state never explains the real reason. What it does is to launch propaganda to try to dissolve the state in society, saying that we all agree, that paying taxes is for the benefit of the community and you pay for that benefit, to have education or healthcare. But this is a misunderstanding, because you don't pay to have education, but because if you don't pay taxes, you go to jail.
Maria Blanco does not know how much tax should be paid. The answer depends on the wealth-generating capacity of a society. The goods and services on which the government spends money should be kept to a minimum, which will depend on the economy and the time we are in. The citizen, with that money, could fund the doctor or health service of his choice, not the service the state tells him to use. Education and healthcare are services that should be available to all, but they should not necessarily be provided by the state, because what the state provides is never free. The level of taxation should be such that as much money as possible is in the pockets of the citizens, so that the citizen can acquire all the goods and services he or she wants in the best possible way.
Rodriguez Braun clarified that there are many pitfalls in this issue of minimum taxation. From a theoretical point of view, Knut Wicksell raised this question at the end of the 19th century in an article on what fair taxation could be. The key point is that it has to be a taxation on which we all agree. Unanimity is the closest we can get to fair taxation. In reality we are a long way from that, with a state that redistributes to give to some by taking from others. With a qualified majority it would have been much more difficult to raise taxes than it has been in practice. Public spending rises until the political profitability of the last euro spent is less than the last euro collected.
Luis Daniel Ávila said that we often have the impression that we cannot reduce taxes and spending because there are certain necessary services that can only be administered by the state, such as education or pensions. But before, these activities were provided by private providers and at convenient prices. In the 20th century, the state stepped into these niches and drove out the private providers, competing with them and making them pay the bill. This happened in the early 20th century. On the internet, there is already, per se, free, quality education that anyone can need. When did that become part of the education system?
With regard to the progressivity of the tax system, María Blanco pointed out that we assume that the rich do not contribute anything, or that we all contribute exactly the same. It is thought that you only contribute if you give money to the state, not if you do other things, such as the jobs you create, the expectations you generate. But that is not considered a contribution, only what you give to the state, which is a decision made by the rulers according to their own criteria and interests. It only takes into account the wealth you generate for your own benefit, not the wealth you generate for society as a whole.
Progressivity has the capacity to be a decoy, warns Carlos Rodríguez Braun. The lure is that someone else is going to pay for public spending, the rich. States, once they reach a certain weight, cannot offload their responsibility without making the population pay. Moreover, proportionality has a depth charge, and that is that proportional taxes can be very high.
For Luis Daniel Ávila, there is a problem with the term contribution, because contribution is voluntary and tax is not. If we were allowed to contribute voluntarily, we would have to see how much the state could collect. It is a rhetorical trick used by the state to make us think that we pay because we want something. The price to be paid for public services is simply more of the same, a trick to try to convince us that we have to pay. The public goods and services for which we supposedly pay are not provided by the state. The doctor gives the diagnosis, the class is taught by the teacher. We are confusing the teachers who provide the service while the politician gets the electoral benefit of having incurred more public expenditure. The state functions badly, inefficiently. These tasks could be done with less cost and more quality. The only group in Spain that can decide whether they want a public or private service without having to pay for both is the civil servants, and 85% of them opt for private healthcare. There must be a reason for this.
Another blatant lie, warns Rodríguez Braun, is the idea that if one has to pay more taxes it is because others do not contribute. The cold facts reveal that this is a blatant lie. In recent decades there have been more and more taxpayers, but taxes have only gone up.
For María Blanco, the affinity between the messages of Pablo Iglesias and those of the Franco regime shows that the state is always on the same line. Assuming that the Treasury's calculations imply being true to yourself is like assuming that the Treasury is you and that loyalty to the Treasury is loyalty to yourself, and that the Treasury is the fatherland. It is a typical emotional trick, because you use what moves people's hearts, but the reality is that the only thing they want is for you to pay up and shut up.
With respect to modern monetary theory, Carlos Rodríguez Braun comments that, for some time now, there has been a fantasy that, since money is wealth, why not multiply it. This is not true. Monetary expansion is a tax. It was Spanish thinkers (the School of Salamanca) who first realised this. Centuries go by and the fallacies are repeated.
María Blanco warns that there is nothing modern about modern monetary theory. The question is whether it supports spending or whether spending forces theorists to launch this nefarious proposal.
What is at stake with fiscal propaganda is the legitimacy of political power, says Carlos Rodríguez Braun. All power needs to be legitimised not only through violence, but also through propaganda. That is why it is very important for him to convey the idea that we are happy with him. The idea that there are people who are not is a criminal idea. While he says that we are happy with him, he tries to do everything possible so that the taxes are not noticed. The state is permanently trying to hide the burden of its fiscal cost while exaggerating the benefit of its spending.
María Blanco says that when you don't agree with the tax system in your country, you don't speak out against it. Of course, defrauding is a crime and they put you in jail for it, but if you leave, like El Rubius, they also demonise you. So what can you do? You can't do anything and, on top of that, they tell you that, as you were born in this country, you have to stay in it, even if you are taxed. We are in a situation of fiscal confinement.
Luis Daniel Ávila criticises the state for subjecting us to a kind of emotional blackmail with the pathetic argument of appealing to our emotions. When it seeks to obtain profit from its propaganda, it directs all its messages to our fears, to our fears, especially the fear of isolation and social repudiation. It is therefore difficult to change what we have been convinced of.
Returning to tax havens, Carlos Rodríguez Braun talks about the concern that many people have about the existence of tax havens. This question, once again, is poorly framed, because it does not ask why tax havens exist. States say that they can only be the result of human evil, but no one ever thinks that they can exist because taxes are too high elsewhere.
For Luis Daniel Ávila, taxes continue to rise as long as it continues to be useful for the politician. Saying that public spending is going to go up gives them votes, but it has to be financed. There are three ways: inflation, current taxes and future taxes, which is what public debt is. When they can't raise taxes any more because citizens are already so fed up, they will choose to keep raising public debt until the crisis explodes.
The key, says María Blanco, is not to try to lower taxes, but to have a treasury without the fat layers of exorbitant public spending.
Hopes for a consensus in the world of politics to lower taxes are slim, Rodríguez Braun laments, because politicians are the ones who have raised taxes in our country, with the argument that the state must be defended. The hope lies in public opinion. To the extent that mistrust of these miraculous messages spreads, there may come a time when politicians are criticised more for this and there may be a breeding ground, because politicians also listen to public opinion. That will be the beginning of the turning point.
María Blanco thinks that, in the end, it will be the European citizens who will decide on spending in Spain because they can't take it any more. The European partners are looking at us and saying that we have a huge government, an excessive fiscal imbalance, but this does not belong to this club. They will ask us to be more rigorous.
Rodríguez Braun reminds us that, if we analyse the history of tax revolts, which are very old, the natural thing to do is to protest. The curious thing is that in the last eighty years democracy has spread as never before and taxes have increased enormously without tremendous protests. But this does not mean that the rulers can do anything. What we need to do is to promote people's critical capacity because, then, it would be easier for us not to believe the misleading messages that politicians throw at us.
Luis Daniel Ávila, states that politicians cannot legitimise themselves unless they make us assume the cost of what they represent. As they are our representatives, they can put whatever they want in the sack.
For Carlos Rodríguez Braun, the idea of the social contract is a fiction insofar as one cannot call a contract what one cannot refuse to sign. To speak of a contract, all parties have to accept it. The idea of the social contract overlaps with the idea of democracy. It is a fiction. The dangerous thing about democracy is that the rulers represent us in contradictory ways, such as asking citizens if they want more public spending, to which they will say yes, and asking them, also, if they want to pay for it, to which they will say no. The state exploits this contradiction. The state exploits this contradiction.
María Blanco adds that if you don't accept this, if you refuse to vote, they tell you that you are outside democracy. Politicians are not accountable. However, even if I don't vote, as I pay my taxes, I have the right to protest, to demand that politicians are accountable.
Finally, Carlos Rodríguez Braun explained that "Hacienda somos todos" is a slogan that began during the Franco regime. The messages have not changed completely, despite the passage of time. In the early years of democracy, what the Treasury said was "The Treasury is now all of us".
The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio González, are the result of the debates held at the meeting held for this purpose at the Foundation and are the responsibility of the authors.
The Rafael del Pino Foundation is not responsible for any comments, opinions or statements made by third parties. In this respect, the FRP is not obliged to monitor the views expressed by such third parties who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their own responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio J. González, are the result of the discussions that took place during the conference organised for this purpose at the Foundation and are the sole responsibility of its authors.