Two Wrongs: Gut and Taxes

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Garen Yegparian

Garen Yegparian


Two otherwise unrelated but Armenia-impacting items caught my eye this week. The first was yet another “brilliancy prize” worthy article by Arye Gut, an Armenian-hating hack. The second was Nikol Pashinyan’s proposal to make the Republic of Armenia’s personal income tax system even more unjust than it currently is.

Arye Gut, “an Azerbaijani Israeli, is a board member of the Israeli-Azerbaijani International Organization, official coordinator of the “Justice for Khojaly!” international campaign in Israel, and an expert in international relations” according to the website, where he has numerous postings. He also enjoys the aegis of the “Jerusalem Post” where he proudly proclaims “I am permanent commentator on Israeli public TV and radio on Azerbaijan-Israeli and Israel-Turkish relations.” He should probably also reveal how much Azerbaijan and Turkey pay him to produce the Amazon-river-scale of drivel he puts out. If you ever want to utterly waste time, raise your blood pressure, and practice your cursing skills, just go to The Jerusalem Post’s archives. His Facebook page features Azerbaijan’s President Aliyev in his main picture.

I was looking for pieces he wrote before stumbling on to his massive pile of manure in the Jerusalem post. When searching online, I came up with some choice items such as “Anti-Semitism in Armenia: A Clear and Present Danger”, “The Holocaust and the Khojaly Massacre Through the Eyes of Contemporaries”, “In Azerbaijan Muslims and Jews Are Allies”, “Misrepresenting Israel And Azerbaijan”, and “Anti-Azerbaijani Rhetoric” which were published on various websites. But the overwhelming majority of his stuff came up on Azerbaijani websites. That should give you a clue as to where this guy is coming from.

His most recent piece “Another anti-Israeli Article in the American pro-Armenian Press” attacks Asbarez editor Ara Khachatourian’s “What Would Happen If an Armenian Diplomat Questions the term Holocaust while in Israel?” This was a critique of Alexander Ben-Zvi, a high level Israeli foreign ministry official, who avoided using the term “Armenian Genocide” during a visit to the Republic of Armenia.

Gut, in his typical detached-from-reality style claims that Khachatourian’s piece is anti-semitic! The temerity of this hack is off the scale of human decency by orders of magnitude. The Genocide becomes “so called”. Armenian media become “full of hysteria” because of their reaction to Israeli non-recognition of the Genocide. And, an observation that Israeli recognition of the Genocide would lead to better relations between Armenia and Israel get distorted into a “condition” for cooperation between the two states. It’s beyond my capacity to grasp how such a complete distorter of fact can be given so much space by otherwise legitimate publications!

Arye Gut's Facebook profile

Arye Gut’s Facebook profile

But let’s move now to Yerevan for the other bit of foolishness up for discussion.

Prime Minister Nikol Pashinyan took to Facebook to announce that after considering 10-15 options, the government has settled on two possible revisions to the tax system in Armenia. One is implementing a flat income tax rate and the other is to reduce the number of tiers, or tax brackets, from the current three to two. Incidentally, they also want to slowly lower the rate over the next few years and equalize the rates paid by locals and outsiders on the business tax front.

Let’s focus on the income taxes because this is where the most pain is inflicted on citizens.

Remember that Armenia has no level of income below which a person would not pay any taxes. Even the U.S., with all its tax favoritism to higher earners, has a cutoff below which people do not pay any income tax. Pashinyan must have been cynically abusing the notion of social justice when describing the proposed two tier system as one based on it.

What all this means is that the poorest part of the population, those making up to a monthly salary of up to 250,000 drams (about $515) would be taxed 23 percent, while those receiving higher salaries would be taxed 25 percent of their income.

Imagine trying to make ends meet at the lower end of these levels of income. Really, there’s not much difference between 23 percent and 25 percent. A truly fair system would have many more brackets/tiers. Just to convey the point I am making, I’ll create an example. Perhaps 10 tiers with tax rates ranging from 10 percent to 50 percent is what should be put in place. Plus, some cutoff, probably at whatever the “poverty level” of income is should be the lowest income on which taxes would be levied. Anyone making less than that amount should pay no taxes.

Tax brackets, or tiers, are meant to spread the burden in an equitable way among citizens. Think about it. Let’s say a household’s (of four people) income is $30,000, and $7,500 (25 percent) has to go to taxes, that leaves only $22,500 for other necessities. But a household (again of four people) with an income of $110,000 would pay $27,500 in taxes leaving $82,500 for other necessities. The impact of 25 percent taxation on the first household is clearly much greater. That’s why the first household should pay, hypothetically, only 5 percent in taxes and the second, again, hypothetically, 30 percent. And at $500,000 income, yet again, hypothetically, the tax right should be 50 percent. This is what is called progressive taxation and should be the approach taken by Pahinian and his economic advisors.

Muddling the picture even more is a reference in the news items to the prime minister implying that more and higher brackets are a disincentive for employers to raise employees’ wages. This makes no sense. I can only hope that this was just misreported.

But the bottom line problem is that the current government in Yerevan is demonstrating the mindset of many of its Western, and specifically U.S., educated members where the “liberal” ideology regarding economics disregards people. Instead, other factors, profit, growth, debt payments, etc. are prioritized over human needs which is what all economies originally arose to fulfill until they were coopted by those who accumulated extreme wealth.

Please, Mr. Pashinyan, back off this foolish course. Establish a minimum income level below which a citizen would not pay taxes. Then, start at a very low tax rate, and increase for higher income levels with the rates rising sharply for the highest levels of money made. Stay true to your supporters who took to the streets to help create a more just society for our homeland.

We in the Diaspora must also speak loudly about this. Perhaps pickets at all Armenian embassies and consulates across the world are necessary.

Source: Asbarez
Link: Two Wrongs: Gut and Taxes