Issue link: https://maltatoday.uberflip.com/i/1511621
8 OPINION 16.11.2023 Hailing a true democracy sharing wealth equitably George Mangion George Mangion is a senior partner at PKF, an audit and consultancy firm, and has over 25 years' experience in accounting, taxation, financial and consultancy services. His efforts have made PKF instrumental in establishing many companies in Malta and established PKF as a leading professional financial service provider on the Island G oing through annals of history, we meet famous philosophers that have le us beads of wisdom for mankind to emulate and revere. In ancient times, one cannot miss the name Solon who stands as a beacon of wisdom and justice. is Greek philosopher, poet, and law- maker of the 6th century BC Athens laid the groundwork for many principles that continue to shape modern socie- ty. Among his enduring contributions, Solon's ideas on democracy, the rule of law, and his insights into economic and moral issues remain remarkably rele- vant in our contemporary world. is article delves into how Solon's legacy resonates with the challenges and com- plexities of our times. At a time when Athens was marred by social inequality, corruption, nepotism and political strife, Solon devised a set of constitutional reforms that aimed to establish a fairer system of govern- ance. His ideas laid the foundation for Athenian democracy, which has since inspired democratic movements world- wide. Back to modern times, where power in most countries rests in the elected party (of a coalition of parties) for the electoral term, this may lead to abuse of democratic powers and breed insipid arrogance. Some democracies have important landmarks consisting of mid-term elec- tions eg USA, but this system is not popular in Europe. Whether it is a full five years or mid-term of two years, there is nothing to stop lawmakers from respecting desires of the polis. e con- cept that power rests with the people seems to morph once elected candi- dates smell power in the air. Moreover, contemporary democracies face their own set of challenges. Issues like voter suppression, misinformation, populism and polarization have raised questions about the health and sustain- ability of democratic systems. Solon's emphasis on broad-based par- ticipation and the rule of law serves as a reminder of the need for inclusivity and accountability in modern democra- cies. His commitment to the rule of law was instrumental in restoring order to Athens. He introduced a legal code that treated all citizens equally, regardless of their wealth or social status. is noble principle remains at the heart of modern legal systems, where justice is supposed to be blind and im- partial. Gone are the abuses of power where elected cabinet members lord over state assets and abusively share some of them among nieces and neph- ews not to mention handpicked proper- ty moguls who on the theme of beau- tifying the country, exploit ODZ plots and issue building permits over sensi- tive areas eg like building 27 apartments close to a world heritage site in Gozo. e executive and police have to pro- tect citizens enjoy serenity and the rule of law. In young democracies, all this sounds Utopian. Issues like corruption, political interference, and the erosion of civil liberties crack the foundations of justice. Solon's unwavering dedication to up- holding the law underscores the impor- tance of an independent judiciary and the need to protect the rule of law from undue influence and lack of resources. Solon's economic reforms in Athens sought to alleviate the suffering of the poor and reduce disparities between the rich and the impoverished. He cancelled debts, abolished debt slavery, and implemented measures to prevent the concentration of wealth in the hands of a few in the Senate. Solon recognized that a just society could not flourish without economic fairness and good governance (undue enrichment must stop). In modern times, economic inequality is a pressing issue. Income disparities, access to good education, and con- centration of wealth in a few families continue to challenge our society. So- lon's commitment to economic fairness reminds us of the importance of pol- icies that promote equity and inclusiv- ity, such as progressive taxation, social safety nets, fully accessible education, the right for a good health and welfare network. Dreamers hope that all this succeeds to activate the trickle-down mecha- nism so that the one per cent in society who possess most wealth, can equitably share it with the rest. Can we now consider how locally, a hidden tax has eroded the value of mon- ey and no amount of COLA instalments can fight the soaring cost of living? In- flation is the silent killer omnipresent on the mid-income citizens. ere are several ways in which inflation can be labelled as a hidden tax. To start with the obvious symptoms are a reduced Purchasing Power. is means consumers can buy fewer goods and services with the same amount of money. It can be seen as a silent tax be- cause the plebs effectively have to spend more to maintain their previous stand- ard of living. But the finance minister went shout- ing over the roof tops saying that no new taxes were loaded in the fancy red box. Banks are the only bodies churning out super profits this year: while some of them do not share the bounty by increasing rates for depositors or divi- dends to shareholders. Again, inflation erodes the real value of savings. is can be especially problematic for retirees or people on fixed incomes as they strug- gle to maintain their standard of living. Although this sounds anathema to the boffins in Castille, one decrees a lost op- portunity in the 2024 budget to intro- duce a selective cut in consumer taxes and giving tax credits to food importers to nip the problem in the bud. By reduc- ing taxes on items like food, medicine, and essential services, the government can ensure that these items remain af- fordable for the majority of the popula- tion. e wholesale direct subsidy of one million euro credited daily to Enemalta (a company partially owned by Chinese investors) and Enemed (a monopoly re- sponsible for fuel distribution and sales) may be a bellwether for state compa- nies. Published accounts are three years in arrears. But such non-discretionary subsidies for the past three years ignore the fact that the rich gain in cheap energy as much as the plebs (although the latter do not afford luxury yachts, heavy SUVs or heated swimming pools which guz- zle cheap energy). By the way, the Commission has al- ready warned us to change to non-dis- criminatory subsidies and use them to repay debt. Discriminatory subsidies ensure that the assistance reaches the intended beneficiaries. Last though not least, the Central Bank can also play a crucial role in con- trolling inflation through monetary pol- icy. If budget policies succeed to attract multi-nationals, REITS or fabless units in the microchip sphere, then such ac- quired wealth can absorb part of infla- tionary pressures.