Romanians pay 70% of what they earn to the state, claims a former bank manager. “Now do you understand how the tax system works?”

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Romanians pay to the state approximately 70% of what they earn, claims Radu Georgescu, former financial director of a bank, while large companies pay almost nothing.

The economist first explained how taxes arose out of the need for states to finance their deficits and spending.

“The first invention of the state: the income tax. In 1850 Great Britain needed money to finance her wars of conquest. The finance minister invented a tax on people’s incomes. He called it Income Tax. Logically, people revolted. 10 years of popular uprisings followed. In Romania, wage taxes represent 42% of revenues. The second invention of the state: VAT. In 1950, France had a very large budget deficit. The Finance Minister of France invented a tax that is taken after the income has already been taxed. He called it VAT. wow Wait a minute. The state takes your income tax. And from the net income you start paying another tax? When Americans saw this tax, they said that VAT is a stupid tax. Americans do not have VAT. In Romania, consumption taxes (VAT, excise) are around 25%”, he also wrote.

The last intervention of the state meant the tax on things purchased with the money that was already taxed two hours ago.

“The Third Invention of the State: Taxes on Buildings, Lands, and Cars. If you buy a house, land, car, the state comes and takes other taxes. wow Wait a minute. The state takes your income tax. From your net income you pay another tax, VAT, when you buy goods. And the state comes and takes other taxes from you after you bought the goods?”, adds the expert.

However, says Radu Georgescu, the taxes only apply to people and small companies, and large companies are exempted from them because they have a strong ability to lobby.

“These rules do not apply to everyone. I am very amused by the discussions about the “pole tax”. 3 days ago taxes increased for more than 2 million people and for more than 700,000 companies. But the most talked about is the “pole tax”. This happens because this tax impacts the big energy and telecommunications companies the most. And these companies have the financial power to do tax lobbying. A financial power infinitely greater than the 2 million people and 700,000 companies,” he claims.

Georgescu: Is it moral?

“In short: The ‘Pole Tax’ is a tax on the assets of energy and telecom companies (oil rigs, masts with telecommunication antennas, etc.). It is exactly the same tax that all people and all companies pay for apartments, buildings, land and cars. The even funnier part is that these big firms are not lobbying for tax cuts for the 2 million people and 700,000 companies. I am not interested in this topic. The reason is simple. These firms do not pay increased taxes for employees. And they don’t pay tax on dividends in Romania either because the Fiscal Code says that foreign companies don’t pay tax on dividends in Romania. Pam Pam. Now you understand how the tax system works?”, says the economist.

He concludes with a question he says is worth 100 points: “Is it moral for the state to take 70 percent of the monthly income of those who do not have the financial power to lobby tax?”