PIMBILIMANO

Chanda Chisala,

You say,

"My argument against the taxes was from my perspective as a Zambian, and not necessarily an argument that the mines will use. But since there is no distinction between taxes on Zambian mine owners (or business owners in general) and taxes on foreign mine owners, conceptually, legally or practically, an argument used by a Zambian against tax increases for the mines can also validly be used by a foreign investor."

You must have come across one of my exchanges with Abena Kandolo in which I admitted that as stakeholders, we do have a right and a responsibility to call our representatives (GRZ) up on issues of fiscal maladministration (abuse, misuse, and non-use).

The problem I have with your angle of view is, it seems to suggest that the absence of abuse, misuse, non-use, etc, would would justify raising of taxes although you had argued in your initial article that taxes were a detriment to development. The linear attribute in this argument downplays the robustness (if you will) of the reverse thought process that the government can actually run a surplus, under "tight" fiscal management and still propose to raise taxes. You would agree that such an act would be proper and justified. And your question would not arise then, would it now?

That being a strong probability, I promise you this, you will be hard pressed to find one insane foreign investor who would cite ineptitude in GRZ fiscal management as basis for negotiation in this go round. Investor's, whoever they are, would isolate themselves by knowing and observing their limits.

You also say that my rental analogy falls apart [because the definition of who owns the assets] encompasses the stakeholders.

Specifically,

"We pay taxes, not only as business owners and workers, but we will pay THE SAME taxes (as foreigners) when we own mines. These current mining taxes apply not only to foreign mine owners but to all prospective Zambian mine owners as well. And even if the current owners sold their mines to indigenous Zambians, the same government taxes will still apply to the new (Zambian) owners. This means that there is no distinction between Zambians and foreigners on this issue, and this provides a problem of absurdity to your conception: how can Zambians pay rent on their own property?"

The analogy was restricted to and sought to demonstrate the perceived ineptitude of the [owner] of property does not impinge upon the interests of the renter, hence the separation.

Having addressed the [WHO] part, one about the restaurant should definitively address your concern about [WHY] pay when you are the owner.

It is my unscientific observation that majority of Zambians is yet to learn that because you “own a restaurant, you don’t get yourself bellyful up in there for free. You can only do it so many times before you go belly up. Rule of Thumb: [anyone] who walks through the door and orders a meal must pay. This is a very basic classic economic principle.

It should also serve to remind you that you pay for the meals because you may own the business but your business is a separate entity from you.

And that is not a contradiction.

Plainly, my conception of the analogy is not wrong.

CHANDA CHISALA

Pimbilimano,

You wrote:

"...I promise you this, you will be hard pressed to find one insane foreign investor who would cite ineptitude in GRZ fiscal management as basis for negotiation in this go round."

Now Pimbi,

I'm not sure I understand why you keep insisting that the investors will not use my argument in their negotiations with government. At no point have I said they will, and I believe they will not, so what exactly is the point of keeping on pressing that point which is not in dispute? The fact that they will not use it does not mean it's not a true or valid point in itself. There are some truths that one might not be in an appropriate position to use, politically, just like white people in Zambia (Zambians or not) might find it difficult or inappropriate to say things like "this country was better managed when the white coloniailists were in charge" whether or not this is true, but a black Zambian can easily say that and defend it. The point is that I have no political hurdle in arguing my point, as a Zambian, whereas a foreigner might find it problematic, but that does not change the fact that it is a true and valid point even for him to use, even if he won't do it for political reasons. Your job is simply to show that it is not even true, as a point.

In the following statement you apparently make that attempt, by merely invoking another "false analogy" fallacy**:

"It is my unscientific observation that majority of Zambians is yet to learn that because you “own a restaurant, you don’t get yourself bellyful up in there for free. You can only do it so many times before you go belly up. Rule of Thumb: [anyone] who walks through the door and orders a meal must pay. This is a very basic classic economic principle."

Yes, this is indeed a "very basic economic principle" FOR BUSINESSES. It is not a blanket economic principle for any and every economic use of YOUR property. Thus, someone can come to you and say, "i want to borrow your car for a day, how much will you charge me?" You can charge him 100 dollars. This does not mean that you will now always pay 100 dollars to yourself whenever you use that car yourself. You will only follow this "principle" WHEN it becomes a BUSINESS.

So, if you are saying that Zambia is a BUSINESS, then that "basic economic principle" indeed applies. Are you therefore saying that Zambia is a business, and the TAX is the method by which that business makes profit?

If you say, "no, my rent/restaurant is only an analogy", then you can not start demanding that we treat Zambia (and its taxation) the way we treat businesses (and its prices) if this is ONLY an analogy for just one point. The point you are trying to make from this analogy is only valid if Zambia is a business because in a business, your right to raise prices is not related to how you use the money, and in a business, you should not consume your product without pay. These are economic principles applicable to property as BUSINESSES, not just to property irregardless of context.

The debate will be shorter if we sort out this point first. Is Zambia a business entity, which we own as Zambians, and which makes profits through taxes? Do all principles of businesses therefore apply to Zambia as a business entity? If it is not a business and the principles do not apply, then on what basis are you arguing for the application of "very basic economic principles" to this non-business entity?

AS long as you keep equivocating on the limits of your own analogy, it is impossible for us to make progress in the discussion.

[I must also quickly address this point you made since it seems to be "the problem" you have with my position:

You wrote: "The problem I have with your angle of view is, it seems to suggest that the absence of abuse, misuse, non-use, etc, would would justify raising of taxes although you had argued in your initial article that taxes were a detriment to development. "

I don't know how you got that impression since i clearly stated that if the money is not misused, abused or unused, government will find that it needs only a small percentage of the tax it collects (for "genuine" uses), and this is precisely my basis for saying we should insist that they stop the excessive thefts and misuses instead of raising the taxes for anyone.]

**NOTE: I would like you to visit this page, for a definition of a "False Analogy" (among Logical fallacies), because it essentially uses your specific case as an example (see example ii): http://www.onegoodmove.org/fallacy/falsean.htm

(or just google "false analogy" and "logical fallacies")

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