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Death & Taxes, Kuwaiti Version
Posted: 12 Aug 2009

 

That sage of my hometown of Philadelphia, Benjamin Franklin, is credited with the insight that the only certainties in life are death and taxes.  While that may be true in much of the world, life is simpler in the Arab Gulf states, where the only certainty is mortality.  In Kuwait, where I am now, and other oil-rich Gulf states, there are no taxes.

Have I found Paradise?  Does utopia come in the form of governments that recognize that a citizen's earnings belong to him, free and clear of claims by the state?

kuwaiti license plateKuwaiti native Abdul Rahman Al-Sayed Hashim told me of his experience studying in Arizona in 1972.  None of the American students had heard of Kuwait, so he told them it was a small Arab country with lots of oil and no taxes.  Abdul Rahman described how the American students' eyes grew wide with amazement upon hearing about a country without taxes.  The students enlisted the interest of local newspapers who wrote stories about this mythical tax-free land.  If this little Arab country could make it without taxes, why not the great USA?

Abdul Rahman, a manager at the Kuwait Fund for Arab Economic Development, shared this anecdote with me as I interviewed him about the Kuwaiti government's foreign aid programs.  We discussed the Fund's accountability, and Abdul Rahman stated that the Fund must be transparent to, and meet with the approval of, Kuwaiti taxpayers.  I looked up from my notes.

Taxpayers?

Abdul Rahman admitted to using a little poetic license in his choice of words.  Speaking to me, the American, he was using the language of American accountability -- government must be accountable to the American people because we pay taxes and we voice our preferences over how our taxes are spent at the polls.  Not so in Kuwait.  In the oil-wealthy Gulf states the famous American revolutionary war cry is flipped on its head, with the result: "No representation without taxation."

kuwait towersIn an interesting twist, Abdul Rahman informed me that Kuwait's Council of Ministers is studying a proposal to introduce a minimal income tax here, the burden of which would fall mostly on corporations rather than individuals and families.  He cited two reasons for the government's interest in the proposal: 1) it would prepare the populace for a post-oil future in which case the government would need taxes to function, and 2) it would solicit respect for public services, such as parks, because people would feel a sense of ownership in them.

This is a fascinating little morsel of information to a political scientist.  I find it highly unlikely that the Kuwaiti government would introduce taxes -- and introduce a possible source of public discontent, plus the need for increased popular responsiveness -- if the financial situation does not demand it.  But it would be quite interesting if I'm wrong!  Let's see what happens.

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