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Middle class not sacred

Feb 04,2018 - Last updated at Feb 04,2018

Several years ago, “middle class” as a political and social concept was not in circulation in Jordan. It was not used by the opposition as a strong instrument to support or resist certain measures called for by the economic reform programme ostensibly for the sake of protecting the middle class.

The reason is that almost all Jordanians were middle class. To say middle class was equivalent to saying the people.

Things are different now. Middle class is the buzzword to gain popularity, raise objections and oppose change. The middle class is supposed to be untouchable like a sacred cow, especially when it comes to imposing new taxes and raising prices needed to support the treasury revenue.

Basically, the people are divided into three classes: Low class for the poor whom surveys estimate to make up around 15 per cent of the population, and the high class, that includes the rich, which could not form more than 15 per cent, and the middle class, which is equal to 70 per cent or more of the population.

As far as the lower class is concerned, they are beyond consideration for the purpose of taxes. The proceeds are the main source of revenue for the treasury.

The wealthy segment of society hardly pays direct taxes. The bulk of their income comes from dividends of compared and other capital sources, all tax exempt.

Who then will be ready and able to pay taxes other than the middle class, a group that represents the backbone of society.

It seems as if those who oppose tax reform think taxes are not necessary. We can depend on borrowing and foreign aid letting debt accumulate.

Strictly speaking, one should acknowledge that direct taxes are not applicable to the poor nor the very rich. Only the middle class should shoulder the burden.

The problem in our case is that what the Treasury cannot meet its many commitments with the amount it currently receive as taxes, while at the same time tax payers are not willing or able to take on more taxes.

According to the Treasury, the current system is not sufficient. It points out the fact that taxes in Jordan as a percentage of GDP are lower than in other countries in a similar stage of development. On the other hand, tax payers are under the impression that the present taxes are too high, and should be reduced while 95 per cent of the people do not pay income tax.

 

Taking the side of the middle class through popular slogans is a sort of political hypocrisy. It means creating difficulties for the government and placing roadblocks in the economic reform path.

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