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Tuesday, August 31, 2010

Nyanza To Be Double Taxed Under The New Constitution

By Mwarang'ethe

On 27th August, 2010, the day Kenyans promulgated a “new constitution,” the Kenyan Prime Minister, Raila Odinga told us that, in accordance with the best constitutional experts, we are “Free at last, from the tyranny of the State,” as we read here. On his part, the President, Mwai Kibaki told us that, “It’s a new dawn for Kenya, and we deserve to celebrate,” as we read here:

To reinforce this wonderful message, Julius Kipng’etich, he of the KWS, told us jubilantly this: “Ready for takeoff: Finally, Kenya has a blueprint to be an economic powerhouse,” like Singapore, Honk Kong and Botswana as we read here:

On our part, we declare that, to rely on so called constitutional law experts to draft a constitution was a terrible mistake. What we needed are men and women well versed with Ancient, Middle Ages and Modern history (history of rise and decay of civilizations), economics (history of economic ideas), philosophy (moral philosophy) and sociology. With such people, we would only need a single lawyer, who need not call himself pompous names such a constitutional law expert, for his job will be that of a mere draftsman. This is a heavy charge against eminent lawyers like Ghai and Nzamba Kitonga. However, we shall support it by demonstrating how Nyanza, a region that has suffered terrible economic injustice in the past will now be double taxed under this wonderful “new constitution ” of theirs.

On 31st May, 2010, the DN reported this: “Fishermen on Lake Victoria to pay fee.” See here . Among other stuff, we read this: Fishermen on Lake Victoria will soon start paying fees to be allowed to ply their trade on the water body. This is one of the ways that a joint fisheries ministers meeting between the three countries using the lake came up with as a source of funding. It is among a raft of measures aimed at raising money to run affairs of the sector. Also, “All countries must ensure that the landing site user fee is legislated as a funding mechanism for Beach Management Unit.”

By introducing land rent on the Nyanza fishermen, the Kenyan government is telling them this. No other Kenyan will pay taxes to maintain the lake. All the revenue to maintain the lake must therefore, come from those who benefit from resources provided by Nature. This is the way forward, and we fully support this proposal. Our proposal along these lines can be read under “Proposed Constitution: Land Question Mishandled ". However, note this very carefully. In addition to this land rent, the poor Nyanza fishermen will also pay other taxes such as VAT when they buy necessities of life like salt and sugar.

If the poor fishermen from Nyanza must exclusively pay to maintain “their” lake, how do we propose to treat those others who “fish” in waters called Nairobi, Thika road or Machakos etc? The answer is here. On 7th July, 2010, inquiring mind read this in the Standard: “Speculators anxious over Machakos land”.

Among other stuff, inquiring minds read this. A certain bare land in Machakos “turned into a fruitful vine overnight after the State made its intentions public on the development akin to California’s Silicon Valley.” In other words, when the State, whose tyranny we are told is over by Raila Odinga announced the INTENTION to build some infrastructure funded by the VAT paid by the poor fisherman from Nyanza, a lot of “investors” rushed to buy land to “secure vantage positions ahead of the technopolis."

Why are they doing this? Simple, "People who bought an acre at Sh300, 000 and less five months ago sold it at Sh800, 000 within a month." Simply, within a month, these so called investors pocketed Sh500, 000 while doing ABSOLUTELY NOTHING. So, who has made these millionaires and billionaire? The poor fishermen in Nyanza who must pay VAT, income tax to the Kenyan government so as to build the infrastructure which raises the value of the land for the FEW who are strategically placed. If you do not call this tyranny and ROBERY, then, we would like hear what you call it. Simply, ROBBERY just like that of a common thug with an AK 47, but, this time without guilt feelings because you can hide behind a fiction called State.

There have been endless talks about wealth gap between the Nyanza fishermen and “investors” such as the ones we read about here. Herein, we demonstrate the SOURCE. So, how do solve the problem? Extremely simple. Require those who “fish” in Nairobi, Machakos, Thika road etc to EXCLUSIVELY pay for the privilege of “fishing” in such rich waters. In other words, STOP ROBBING the poor Nyanza fishermen via VAT etc, and require those who occupy Muthaiga, Karen, Thika road, Kiambu, Machakos to pay for the police, roads, and sewage.

Where will they get the money from? Only a constitutional lawyer cannot see what a fool can see. Take the sh500, 000 as an example for all the land surrounding the technopolis and fund the common infrastructure therein. If these so called “investors” (gamblers) want to get rich, we are very happy with that, but, let them develop the land and build factories so as to create real wealth if they are men and women of substance. Even better, we will leave them to pocket all the gains once they pay land values.

There are those like Phil, Chris, and Philip who have asserted that, we are utopian. Fine. We ask why is it utopian when we demand that, those who occupy land in Nairobi be treated in the same manner as we propose to treat the poor fishermen in Nyanza? In all honesty, we have demanded what is just in law and equity. This is so because; we have demanded what is right before God and Man.

Let the useless land speculators who unlike the Nyanza fishermen who give us food relinquish land values created by poor fishermen from Nyanza so as to fund the necessary infrastructure. So, implemented, we would relieve the long suffering fishermen from this state sanctioned tyranny and robbery? This is the SIMPLE formula for liberty and wealth creation.

However, instead of such a simple formula, Kenyans have come up with complicated nonsense to hide their naked formulas of oppression. We denounce these complicated formulas for what they are. The shameless shifting of the man’s curse that; he shall eat bread from the sweat of his brow, to the shoulders of his helpless brother. We therefore, violate both Divine and Natural laws for we build a nation in total disregard of true nature of both physical and moral nature of man. Nothing built upon such rotten foundation can stand. A heavy price shall be paid for this attempted impunity.

Many conclusions flow from above observations. Firstly, the failure to adhere to what we have said has brought about so called welfare state. However, anyone versed with the history of this stupidity from the Roman times, knows where all is going to end up. Even worse, when we refuse to take what is social wealth by privatising it, we drive the land prices up through speculation which eats all our bank credit as they try to grab a piece of the free lunch instead of funding real wealth creation.

The consequences for this are very grave for we squeeze industrial capitalist’s profits and thereby, wages for the labour. How we intend to industrialise a nation of low profits and low wages is unknown to us. In other words, we have squandered the greatest opportunity to lay a firm and just foundation for industrializing our nation so as to remove want among our people.

Some will tell us about the land commission that is forthcoming. Well, our answer is that, we have seen this movie many times in history and we are pretty sure what is going to happen. For instance, the “new constitution” talks about limiting the size of land. As the Machakos story educates us, it is not size that matters, it is three things. Location, location and location.

65 comments:

Anonymous said...

Well said brother Mwarangethe and welcome back.

As usual your ideas are original and pin point accurate. Do not tire to teach us, many are learning important lessons from you and we shall apply them when we get into positions of influence.

Omar M.D.

Anonymous said...

@ Mwarang'ethe.....

...'.This constitution of theirs'... are you trying to tell us that the constitution belongs to the Luo, I can understand from your name 'Mwarang'ethe' I can tell what part of Kenya you come from already.

Secondly, It's utter rubbish what nonsense you are telling us, why didn't you apply for a job to be part of the constitutional review team, bure kabisa.

You were not in the Roman team, medieval times neither were you there during the great depression of the 1930s. Mwarang'ethe we cannot continue to live in history but we can learn from history, that is why after living with the old constitution it was time for a new one.

Now 'Prof' Mwarang'ethe...since you don't come from Nyanza let me break it down for you...since you decided to pick a resolution by the ministers to pay 'tax'.. Aren't you the same guy who usually tells us not to rely on information from the media, school e.t.c coz that's what they want to make us believe.

Since you come from CENTRAL, please know that, Fishing in the Lake has never been free, the way you put it. Fishermen have never just taken boats and joyride looking for fish, the tax has always been there. Infact one is charged per boat load and not per tilapia, that is why fishermen found in the Uganda waters fishing pay around Shs 50,000 per boat or are arrested.

In the spirit of EAC cooperation and to avoid the constant 'lake wars' a tax has been introduced so that fishermen from the region are free to fish wherever they please.

Thats why there is also a limit to the number of boats that are allowed into the Lake on a daily basis and also the times are monitored.

There has also been incidences of over fishing plus the nile perch is really 'feasting' on the tilapia population. Hence the tilapia's now breed near Uganda.

As you are aware Nyanza has Six counties and S. Nyanza four of this Counties. And you already know how they will run so I dont have to dwell on that.

Homa Bay County will be the greatest beneficiary... The 'Tax' is suppossed to construct the dilapitated Rongo road that goes all the way to Kisumu (Airport) there are plans underway to not only rely on Kisumu airport but also to upgrade the Homa Bay Airstrip to enable larger planes land there.

The European Union - Fish export quota will increase and you know the kind of standards that they demand - require lead free fish.

Storage Facilities need to be constructed in Kendu Bay, Homa Bay, Kisumu and Nyalenda Markets - are you Mwarang'ethe going to provide the funds for all this development knowing very well how counties will operate.

Furthermore, the 'tax' will be used to construct more fish ponds in the Nyanza region to reduce over reliance on L.Victoria. Even before the so called 'tax' an additional 3,000 fish ponds have been built in Nyanza, with each having a capacity of 2,000 fish per 8 months for Tilapia, the going price for a Tilapia in Kisumu is between shs. 200 and 600 bob do the math( Please Travel there and see for yourself and dont rely only on Nation, Standard websites)

In addition a factory for processing fish by products like Omega 3 Supplements is in the pipeline.

So today you have Lied through your Teeth 'Prof' Mwarang'ethe.

I will await for you to come out guns blazing to rescue your ego.

So there is NO TAX! That will be new in Nyanza Fishing 'Prof' Mwarang'ethe.

Anonymous said...

I like it when you guys argue economics instead of the cheap nonsense chris writes. Am not as smart as you but I will follow the debate.

Anonymous said...

Ati 'Tax'.... Mwarang'ethe you have never been to the Lake and you don't know what kind of fee fishermen pay to fish.

It's not the same way that you used to catch tadpoles in school for 'Free'.

By the way why didn't you apply for a job with COE and tell them that you went to school with Nostradamus, Aristotle and Einstein so that they include your 'PERFECT' views in the constitution.

Hii mambo ya ku surf Nation na Standard kwa net wacha, What you dont understand wachana nayo. Stick to mambo ya Githeri history.

R-r-r-r-r-roger that.

Anonymous said...

@Mwarang'ethe , I usually agree with you on some of your posts but with this I beg to differ with you.

Fishing in Lake Victoria has never been 'free' since the days of the Colonial Masters, as correctly stated in an earlier post fishermen pay per boat load, isn't this already taxation?

The fisheries sector plays an important role in the Kenyan National economy, contributing about 0.5% to GDP and has been supporting about 80,000 people directly and about 800,000 people indirectly.

As you have acknowledged earlier, historical injustices to the Nyanza community is well known.

A total of 159,776 Metric Tonnes of fish valued at approximately Ksh. 8 Billion out of which Ksh. 5 Billion is from Exports alone. Now the tax is to avoid repeating what the earlier blogger has stated is going to be further utilised for;

1. Developing marketing infrastructure
2. Develop market information systems
3. Promote investment in aquaculture through public private partnerships.
4. Organise promotions through trade fairs / promotions
5. Develop aquaculture extension guidelines and standard operating procedures.

Result in; increase in disposable income for the fishermen, and better be able to withstand 'shocks' (read political injustice), boost rural development especially for people living near perennial and seasonal water bodies.

With fish ponds now proping up everywhere in Nyanza and also all over the country the reason is obvious MONEY!

Of particular note for example, an average fish pond costs about Shs. 25,000. A mature Tilapia lays about 10,000 eggs a month, it takes between 6 -8 months for one to mature.

A fingerlin costs about shs 5. So if you say you have 1000 tilapias and each lays about 10,000 eggs a month which take about 4-6 weeks to hatch the financial gains are enormous, furthermore fish can simply feed on chicken and pig droppings till they mature (cheap feed).

This explains why CENTRAL province has the largest area of land under aquaculture in hectares CENTRAL 219.2 ha and NYANZA 40.8 ha.

If you dont have the time to visit Nyanza and see the plans being put out for aquaculture development through use of the 'Tax' am sure you can visit the following areas which maybe closer to home Mwarang'ethe.

1. Sagana Fish Farm - Kirinyaga
2. Ndaragua Trout Farm - Nyandarua
3. Kiganjo Trout Hatchery - Nyeri
4. Muranga fish Multiplication centre - Murang'a


Now that since 1984 aquaculture has been the world's fastest growing food producing sector at 11% per annum and of this growth, developing countries contribute 90% of this total growth.

The 'tax' will now lay the proper infrastructure that will enable aquaculture grow in Nyanza and also enable L.Victoria to 're-stock' dwindling Tilapia Population.

Also Mwarang'ethe Please look for and read Dr. Paul Otuoma's ( Former Fisheries Minister) and Oparanya's joint papers on

The Poverty Reduction strategy and National Poverty eradication plan.

Mwarang'ethe said...

Anonymous said...
@ Mwarang'ethe.....

...'.This constitution of theirs'... are you trying to tell us that the constitution belongs to the Luo, I can understand from your name 'Mwarang'ethe' I can tell what part of Kenya you come from already.

xxx

Hold your horses. As far as we are aware, Ghai, Nzamba, Kibaki, and many other Kenyans who supported this law are not Luos.

More so, in your attempt to enter usual tribal nonsense, you miss the big picture we are painting. It is this.

Under the current constitution as well as the old one, those who occupy the BEST LANDS do not pay tax to support the government. So, who has and will continue to pay tax? The poor.

Simply, when u live or own the best lands, the amount of tax you pay every year is REFUNDED to you via increased land values.

As we demonstrate, land values rise from POPULATION increament and INFRASTRUCTURE funded by the taxpayers.

Thus, when you pocket these values created BY ALL, you get back all the tax you paid.

However, for the poor who do not own such lands, there is no such refunds. Therein, we see the SOURCE of wealth inequality.

Thus, deal with the issues from this angle and not where one comes from.

xxx

Secondly, It's utter rubbish what nonsense you are telling us, why didn't you apply for a job to be part of the constitutional review team, bure kabisa.

xxx

Does it become nonsense merely because we never applied for a job?

Also, may you note this please. Lawyers are trained to know the what law is. They are not necessarily educated on how law ought to be or how society ought to be organised to ensure freedom.

For instance, in laws schools they teach us about so called human rights. However, you are not taught that, so called human rights is an acceptance of master and slave relationship. Thats why no matter what we do, states keep on violating these HR.

xxx

Mwarang'ethe we cannot continue to live in history but we can learn from history, that is why after living with the old constitution it was time for a new one.

xxx

There are natural laws in operation in this universe. When man violates them, he gets his bitter fruits.

As such, when you review what human mind has attempted for the last 6000 years and has failed, you know what to avoid for the laws that operated then, are still in force.

That is the meaning of learning from history. If we review this new constitution from this perspective, it is a non - starter.


As concerns "old" and "new" constitution silly argument, we answer it this way.

It is absolutely IRRATIONAL to use what is NEW as the standard of value.

It is also IRRATIONAL to believe something is good merely because it is new.

It equally IRRATIONAL to use the old as the standard of value.

xxx

Aren't you the same guy who usually tells us not to rely on information from the media, school e.t.c coz that's what they want to make us believe.

xxx

You do not get it. To have a proper appreciation of what is really happening, or the implication of state policies, you need to have a very solid understanding of ESSENTIAL principles of how a society is organised.

Now, that understanding of basic principles you will not find in the newspapers. And, since newspapers are what many read, they are unable to see the real deal.

However, when you have read serious books and understood these forces, you are in a position to analyse the real meaning of disjointed stuff you see on newspapers and in politics.

For instance, one is only able to join these dots if he/she is versed with rent theory which you will never learn from DN etc.

Anonymous said...

Mwarangethe,

I had a bumpy ride from work this late afternoon because my usual one and half hour train ride (173.5 mph) from work was overcrowded than it normally is, an unusual high volume in ridership for this time of the day.

So, I couldn't manage to sneek in some time to comment on some of the issues you have raised reagarding ancient historians, the fishing industry in Lake Nyanza ("Lake Victoria" LOL) and the soon to be Eldorado Valley in Machakos.

CUWYL, I have to alight at the next stop.

Mwarang'ethe said...

The 'tax' will now lay the proper infrastructure that will enable aquaculture grow in Nyanza and also enable L.Victoria to 're-stock' dwindling Tilapia Population.

xxx

We 100% agree with this tax and we made that absolutely clear.

What we reject totally is the idea of these fishermen paying other taxes like the VAT, income tax etc which are used to fund roads etc which increase land values for the FEW. We hope this is clear as we go forward.

xxx

Also Mwarang'ethe Please look for and read Dr. Paul Otuoma's ( Former Fisheries Minister) and Oparanya's joint papers on

The Poverty Reduction strategy and National Poverty eradication plan.

xxx

This is a joke. All these poverty reduction and eradication plans are WB/IMF snake oil medicine meant to perpertuate poverty and conflict in Africa and then bring so called ICC as our saviour.

From a serious and extensive review of the last 500 years, there is only one way of ending poverty. Simple, INDUSTRIALISE the nation. Period.

If Otuoma has an INDUSTRIAL POLICY like that Hamilton gave young America, or like that Germans used when they bought these ideas from the British, or the British or Japan who loaned an America lawyer in 1860's let us have it, but, for these snake oils from WB/IMF, no, no.

Anonymous said...

Finally! A full fledged debate on Kumekucha with facts & figures without resorting to name calling. Keep it up folks! This is encouraging.

Bobby6Killer

Chris said...

@ Mwarang'ethe
My dear brother,

You are a brilliant man. No doubt about that. But I think your problem is that you do not have enough experience on the ground. Your theories are all up there so high in the sky that the birds wouldn't reach them if they tried, let alone most ordinary Kenyans I know wouldn't have a clue as to what the hell you are talking about. Is there any way you can study the lives of those who had to digest BIG ideas for the masses (the ones you like of course) and come up with a system of doing so? There is no doubt that you seem to have a lot of passion for what you say. I have never met a man who discusses exactly the same thing for over a year (going onto 2 years now. Or is it 3?).

I have read a little history on my own and done a little economics that has allowed me to digest some pretty complex stuff, but I am NOT ashamed to admit that I really struggle to make head or tail of what you are saying most of the time.

The first rule in this business is that you must communicate. How do you reach people with your idea if you can't make them understand what you are trying to say?

My second beef with you is that what you are really doing is trashing our baby steps with the new constitution. Nobody said it is cast in stone. With time we can change things. The baby needs to start sitting up first and then walking, not to mention grow some teeth to digest the HEAVY food you have been shoving down a baby still in the womb. Hell we have to solve some pretty basic problems first. Change takes time my brother.

My brother the reason why some guys here are angry with you is simply put, because you are calling the only offspring we have managed to produce at such GREAT cost to human life and finances. You don't tell your neighbour that their child is ugly with a big head and ears smaller than a roll bearing. You spare them and when the baby grows you hint that you know a good plastic surgeon who can do something.

My two cents!!

Anonymous said...

chris, u r unfair to mwarabgethe. he's talking about the big picture...and i, being a total layman, understand him perfectly. this stuff is not utopian. from the article, i easily understand the conflict of localized wealth generation. on one side, we hav a lake, and on the other, in machakos, we hav barren land. at the lake, we r applyng what mwarejgethe has been saying for the past 3 years. why not apply same principle uniformly, and especiallywhere land is involved...in all honesty, chris, u've been writing on one issue of politics for the past how many years. his articles r refreshing.... i say give him the main forum!!

Anonymous said...

great men discuss ideas, whereas others are focused on events/people on the so-called 'ground'...carry on prof...but now, since we missed the fundamentals in our new constituition, can we avoid the pitfalls that others went thru in history, so that we avoid the eventual doom u r predicting? is constitution the only thing that is charting the path of our destiny? any plan B dear prof?!

Double Tax said...

@Mwarang'ethe,

You need to see what is happening on the ground before actually 'trashing' all comments. We don't have to always agree with your theories as a 'democrat' you will agree that on this issue you have not been to the Lake Basin.

I work hard to earn my 'petty cash' wages at month end and Mr Tax Waweru of KRA will run away with 30% of my gross income, and these I suppose is my 'Tax' on earnings and when I go and shop for my milk and bread from Mwarang'ethe Kiosk which I suppose is my consumption Tax. I will pay for the bread and Milk Inclusive of the 16% VAT and pay for Mwarang'ethes profit margin in the process.

Now if these is not 'double taxation'.... I just dont understand this tax.

Anonymous said...

The argument Mwarangethe brings out is not hard to digest. He may have lost me in the past when e reverts to history to try and bring some points home but this one is not utopian. Am a Chemist but I can see right through what he is saying and it's nothing but the truth.

My two cents and a question to Mwarangethe, why can't we use th current constitution to do what you propose. Remember the constitution is only a guiding document, the gist lies in the various bills that will support it. Can't we come up with a policy where land values are taxed so that people don't speculate on them? Will this remedy the situation? What if after the government has introduced these land value taxes people stop buying the land, and in the event that is has also scrapped VAT, Income Tax etc then what will fund the state?

You also did not answer my querry from last week. I vividly rememebr the topic but the argument was that BIG corporations are holding governments hostage like is the case here in US. My question then was why can't governments (atleast the Kenyan one) come up with a policy where it owns atleast 49% stake in corporations or in any company that has profits upwards of say 100M? Is so doing then the government can also gain from these profits directly and help run the state? Am not an economist but just a realist.

BTW, healthy debate going on here...

Mwarang'ethe said...

Can't we come up with a policy where land values are taxed so that people don't speculate on them? Will this remedy the situation? What if after the government has introduced these land value taxes people stop buying the land, and in the event that is has also scrapped VAT, Income Tax etc then what will fund the state?

xxx

It is too late now.

In our proposal to the COE, LVT should have been declared the MAIN source of GOK revenue.

LVT is the NATURAL TAXATION for it does not tax WEALTH CREATION (Income tax)and CONSUMPTION (VAT - permission to live tax) which we dearly need.

In addition, it would have been declared that, no income, VAT etc shall be imposed on Kenyans untill and unless all LVT (including airwaves, landing slots etc) has been collected and utilised appropriately.

This would mean that, if there is any corruption, you can object in our courts to payment of tax since the money LVT has not been used appropriately.

Now, you have no such safeguard no matter what they do with your money. They will point the gun you have bought at you and take what they want and enrich a few guys in the name of 2030 Vision.

Now, under the new laws, they will introduce some kind of LVT and limit the amount of land which does not make sense.

However, the LVT will be too low to have any effect. We say this because we have seen the same game elsewhere, in Japan, UK, USA etc.

Even worse, this LVT will be in addition to income tax. Now, the idea behind having LVT as the main tax was to lower the cost of doing business in Kenya than any other nation without sacrificing the living standards of Kenyans. In fact, they would have gone up.

If we lowered the cost of doing business, many investors would be attracted to Kenya because their profits will be taxed let us say at 10% whereas, they are taxed may be 30% in the UK. This would have attracted the finance capital and industrial capital we desperately need.

Seen from this perspective, our "OBSESSION" with land and money is driven by a very broad vision, which is the need to industrialise the nation which is the only way to end poverty.

Some think all that we need is "good leadership" in our counties. Nothing like that will happen.

As we debate, check the land prices in designated county HQs. It is going up and up. All this will only raise rents and squeeze investors and workers. Same nonsense, but, now localised.

As concerns GOK owning corporations, it is a very bad idea.

xxx

We don't have to always agree with your theories as a 'democrat' you will agree that on this issue you have not been to the Lake Basin.

xxx

It is like saying this. One must have travelled and sat at the sun to understand its essential mechanisms.

As concerns your income tax and VAT, we say this. All these taxes are unnecessary. More so, they are all meant to keep you poor and stupid. The GOK can get enough tax from natural resources like airwaves.

By the way, ZAIN has changed hands a couple of times. How much CAPITAL GAINS/RENT did these guys pocket? We answer. Billions.

Thus, if the GOK was serious about poverty, they would have taken these free billions and leave thousands of our teachers, doctors with their income intact.

Anonymous said...

Population census

do you believe them
There is a direct correlation to the 2007 Presidential elections.
Justifying the same results?

Kweli creating a legacy holds no guns!

Big Ideas said...

@Mwarang'ethe..

The GOK can get enough tax from natural resources like airwaves...??? Kindly, expound.

Anonymous said...

@ Mwarang'ethe.

How much CAPITAL GAINS / RENT are these guys going to pocket? We answer billions...

Now seeing that our National Budget is approaching the Ksh 1 Trillion mark, how can the government raise this amount and at the same time leave the doctors, teachers e.t.c untouched?

Seeing that the sold out Zains of this world, safcoms etc are not there like 'chips' and 'mandazi' which are readily available.

Tax is everywhere and the old adage 'Only two things are certain, Death and Taxes'. Even 'Tithe' is a form of tax.

Mwarang'ethe said...

Now seeing that our National Budget is approaching the Ksh 1 Trillion mark, how can the government raise this amount and at the same time leave the doctors, teachers e.t.c untouched?

xxx

Once again, you are not willing to see the whole picture because you only think in terms of what you see today. You are in a box.

When you have a government MAINLY reliant on LVT, you will end up with a lean government. As such, you do not need such huge budget to run a well constructed government.

You see, under our stupid system, you employ a guy to rob the poor fishermen via VAT etc. How many VAT people does KRA employ for instance?

Then, you employ another guy to pay back the same money, or, you have the guy paying school fees for the poor fishermen. This is what makes GOK bloated.

If you do not take wealth from Kenyans via income, VAT etc, they will be left with enough money to buy food, pay for school, medical etc without any need for the government interference. As such, you need not have such a monster of a government in the name of welfare state.

More so, you need to consider this as well. When you make it unprofitable to speculate in land, banks will be forced to loan PRODUCTIVE ACTIVITIES.

This will ensure we have capital for those who are into real business. Today, you cannot get loan to manufacture, but, you can get a loan to speculate in shares and land. This would end.

Also, for those with money from whatever sources will have to get some productive area to invest. Today, they need not do that cos they can go to Machakos and speculate in land. We would remove the mentality of free lunch so that, if you wanna get rich, you have to be productive.

So, take into consideration all these issues and not just look at land as such. It is a new economics and a new way of formulating a government we are talking about.

Anonymous said...

@ Mwarang'ethe

I agree with you completely. The only moral tax is LVT. All other taxes are immoral.

I must say that I'm a big beneficiary of the current unjust tax system. I inherited idle land on Mombasa Rd that's now worth 1,250 times the purchase price 20 years ago. I make much more from capital gains on idle land than from production. I engage in the latter just to kill time so that I don't go crazy watching daytime TV.

The problem with LTV is that it would mean taxing the masses, especially rural folk, directly. This is a sure way of losing an election. That's why the government loves indirect taxes like VAT and slaps direct taxes only on formal sector workers making over 10k, a group that can be bullied since they have very few votes and very low voter turnout. MPs are also big beneficiaries of land speculation.

That doesn't mean you should give up the fight. We have to do the right thing.

Anonymous said...

@-----!

What are you really advocating for the 2nd Republic?

All things considered, I doubt whether your school of thought is going to work nor will it adjust to new economies and a new way of formulating a government we are talking about in a post August 27, 2010 era.

? ... without any need for the government interference.

Are you trying to advocate for a 'laissez faire' type of an economy as the best alternative for the 2nd Republic?

Anonymous said...

Chris,

Great minds discuss ideas, average minds discuss events, small minds discuss people

We understand why you are confused. You and Mwarangethe have always been broadcasting from different wavelengths. While you are stuck in the small minds section with kina Taabu and Phil of Kibera, Mwarangethe has for the last year been giving us fresh ideas that are leaving you envious and scared that people will soon stop reading your boring tribal trash.
The question most kumekucha adherents should ask themselves is. Who would you entrust the future of Kenya on? A man in his 50's who can only recycle politicians news or a young man with grand ideas whose implementation would translate to wealth for all Kenyans?

I bet we all would all go for the second young man. With a new constitution, we should now move away from childish my father is stronger than yours politics to economic politics.

Mwarangethe should not tire of doin the good job.
Chris, we appreciated your kamba, kalenjin, kikuyu...politics 3 years ago but you have to embrace change because your readers now are thirsty of a fresh new start full of ideas..

Anonymous said...

@ 6:11
Can't agree an inch more. About time we shift away from personality cults to issue based discussion. Chris, it is about time u advertise this blog to other academia. It will b fantastic, and richer too, for kenyans. Why not a guest post from a die-hard capitalist ?

kumekucha said...

Right from the onset Kumekucha has always been open to new ideas. That is the reason why Mwarangethe already has such a prominent presence here and will continue to do so for as long as he wishes. We may not say it but we really do appreciate the time he takes to write his thoughtful posts and the time he spends here disecting others. And I don't have to agree with his ideas or methods for him to feel very welcome here, ALWAYS.

I have no intention of ever changing that very basic vision and policy of this blog.

However there are a couple of other things that I hold dear. Amongst them is Kumekucha should always have variety. I know we have not always managed this consistently but I always make an effort to promote it. Secondly Kumekucha must NEVER be boring and should entertain as much as possible. This is the best way of communicating any message as the COE's civil education media campaign (shortly before the referendum this last August) so powerfully illustrated to us all. I think they did a beautiful job of digesting a complex subject like the finer details of constitutional law to the masses. I personally learnt a lot. And so did ZAIN and Safaricom (in their latest TV campaigns).

I don't expect Mwarangethe to change, he really doesn't have to and besides he seems to have attracted his own avid followers some of whom I have met in person. However other usual posts will continue and Kumekucha CANNOT do without filks like the aging pensioner, simple minded Chris who never discusses ideas and many others.

Chris

Anonymous said...

@Mwarang'ethe.
How about we shelf for a moment the hot Machakos land deals for moment and figure out whether Kenyans will continue to be triple taxed for the following defence expenses under the New Constitution.

Re: Kenya Air Force.

In July 2008, it was reported tha Kenya will spend 1.5 bilion KSh to buy 15 (fifteen) former Jordanian Air Force (mitumba) F-5s, 13 (thirteen) F-5E and 2 (two) F-5F (plus training and parts).

They will be added or eventually replace the current F-5 (matatu) fleet.

[Public knowlegde].

LOL! LOL! LOL! LOL! LOL! LOL! LOL! LOL!

10 F-5Es and two F-5F were delivered in 1978 to Sudan Air Force.

Some of the F-5Es were sold to Jordian Air Force. Further two F-5s, defected to Sudan from Ethiopia during the Odagen crisis
.

Why are 1978 F-5Es being procured by Kenya Air Force for combant operational use in 2010?

Question!

Why are billions being wasted on third-hand mitumba jets from a country like Jordan?

Since when did Jordan become a power house in the aviation defence industry?

So far, the USAF is getting rid of a lot of its army and airforce hardware that was once based in Irag and Kuwait.

One wonders why the DOD or Kenya air force did not set out to beg or request for some of the "unwanted/over-used USAF hardware" under the former Cold War pretext of "military aid donated to strategic allies of the USA"?

After all most of the military hardware from the Irag and Kuwait is being shipped back to US where it will end up in various military decommission depots around the US.

Conclusion!

Now I understand why we couldn't dare ourselves to confront Al Bashir, let alone make any attempts to arrest him or detain him in any way, shape or form on August 27, 2010.

Why? Some of the mitumab jet planes ("our pride and joy") that we have in stock might have been owned by his country at one time or another. While his country has upgraded all of their combant airpalnes. Sad but true.

Mwarang'ethe said...

Are you trying to advocate for a 'laissez faire' type of an economy as the best alternative for the 2nd Republic?

8/31/10 5:53 PM

xxx

If taking land values created by ALL to fund our roads and police and leave our poor with their HARD EARNED INCOMES so that, they can pay school fees for their kids without akina Ongeri, is what you call 'laissez faire', we are for it. What is your objection to that?

If having an honest monetary system which is not monopolised by a FEW who SPECULATE in lands, currencies, commodities and stocks instead of having money for PRODUCTIVE ACTIVITIES like agriculture and manufacturing is what you call 'laissez faire' we are for it. What is your objection to this idea?

Today, the global crisis brought by these two monopolies is not clear to many, but, it will soon. And, when the crisis finally hits home, many will cry with one eye.

Anonymous said...

@ anon 6:11, who says you can't have both? The exposes of political personalities can make interesting reading. Just so long as we aren't being told of sexual athletics of a community.

@ anon 5:29 day time tv can be a blast. Today's parliament AM session was sizzling! Who would've thought that Charity Ngilu has, over the last 3, years concentrated 30% of national resources for drilling boreholes in Ukambani only! Charity really does begin at home.

Bobby6Killer

Philip said...

Mwarangethe

The only perfect solution I can think of at the moment is the religious solution when Jesus comes back again, which according to my fellow Christians, is a timeless solution. Solutions to various things have always been coming or been improved because they were not a timelessly perfect solution.

You might have a far much better solution to our problems than what our constitution provides. But then you need to consider time and space that we are at the moment.

I'll repeat what I said before that you need resources in order for your solution to be implemented. Some of these resources are people who need first of all to understand your arguements before they give you support. Maybe if we could have had your constitution it could have failed because of powerful forces which could have easily influenced even the mass, which could have greatly benefited from it, to vote against it.

I'm not trying to discourage you but what I'm trying to say is that your solution is good but the timing can be wrong such that you will need to embrace the better solution as you put together resources to implement yours and not thrash everything.

Whatever you call "bigger picture" can be subjective. Infact I'm the one who is seeing that you aren't seeing the bigger picture, or you've seen only that you have failed to mention. What I personally see as the 'bigger picture' is consideration of time, space and resource that we are and have now, which isn't ready to implement your theories.

If the best solution for trade between people living at the opposite banks of the river is to build a bridge, why should they ignore the ramshackle boat they have been using to cross the river simply because one day it will shatter even though it is benefiting them (but not as much as the bridge)? Should they continue using the ramshackle boat as they raise money to build the bridge? Your arguement seems that they should ignore the boat and resume trade after they have build a bridge. My arguement is that we cannot avoid to move forward, however small the step is, simply because we have a better solution.

Your arguements has been thrashing completely even the little benefit we have got and the little gain we have made due to change of the way we do things and change of leadership.

Philip said...

On leadership

Good leadership by itself is important and will never be useless. A leader is generally an influential person, he has to influence people. You are now influencing people through your facts and theories. Therefore you can't thrash leadership in total yet your theories can be implemented through proper leadership. Good leadership under a wrong system can be useless SOMETIMES but not all the time since sometimes it can change or improve the system to better. Before we argue on leadership we need to look at the system again.

On Economy

Further you have always missed the point on some areas which I can only explain by facts. Since Kibaki took power or Moi left power, whichever angle one will prefer to look at, economy of Kenya improved but not as much as they want us to believe. Unfortunately you normally choose a small section of failings of our economy to thrash everything else. Yes, there has been massive speculations and inflation which cannot be used to measure economic growth but then there has also been improvement in agricultural output, and even creation of wealth.

Yes, I agree with you that our whole system is such that for any wealth created rich people and corporations get more of it yet they haven't toiled as hard as poor people. But then even among the poor they are those who have gained. So what needs to be thrashed is not the whole system but that area that is making the system to rot, which can be lack of proper policy that facilitates income distribution. Maybe that's what you are arguing only that you need to put it in a clear way.


From theory to implementation

My arguement is that you cannot implement what people don't understand and it takes time for people to understand, and in this particular case even more time since people have been brainwashed to follow a particular direction such that its harder for them to understand what you are saying - as hard as making a Christian who has been made to believe that when he dies he goes to heaven directly, even when the Holy book says Jesus ascended into heaven on the third day after His death, and when He comes back the dead will be raised and not the dead will descend from heaven. Therefore you need to know that implementation of what you propose will take time so that you need to embrace the little you have and even see how to maneuver through the same little you have to implement whatever little you can implement.

Further you need to appreciate that we have made a little stride forward since 2002 and they are areas in our constitution which will make us move slightly forward again. But when you thrash everything it creates a mood that what we are doing will never benefit us at all yet some of us are benefiting from it. I will wish that your mood is about how to improve our lives for better rather than how to completely change our lives for the better. I'm very sure that if you were to draft a constitution there are some clauses in the new constitution, which are not in the old constitution, that you will adopt because of its benefits.

Finally

Therefore in order to move forward why don't you concentrate on areas of weakness in our system and see the best way to change them instead of thrashing the whole system.

Why don't you tell us which areas in our new constitution we need to change in order to improve our lives. As I mentioned sometimes back devolution of funds will be improved, why don't you tell us how well we can use these funds to create wealth and secure it and what we need to watch out as we secure this wealth we have created, instead of thrashing the whole document when some parts of it can be used effectively in implementation of parts of your theories. Once this has been achieved maybe they are some areas of your theories that we didn't understand before that will become clear and then we'll further implement.

Anonymous said...

Phillip, I think you are very confused. You lost me with your inappropriate analogies of Jesus and broken boats.
Mwarangethe's ideas are clear and if your attempt was to bring clarity, you have missed the boat by 2 rivers. Stop taking whatever you took and contribute to this debate when you are sober.

NKTiest!!!!!!!!!!!!

Mwarang'ethe said...

Bwana Philip.

The argument about perfect constitution as a rebuttal to our opposition to the legalised plunder of the dispossessed in the name of a new constitution is an argument of moral cowards who are unwilling or, and capable of facing the ugly reality.

We have never asked for a perfect constitution. In the name of God, all we have asked is that, we should lift the heavy yoke we have fastened on the downtrodden for so long. What you should do is educate us how double taxation of the poor is an improvement on their lot.

The question is who is fastening this yoke on the poor? We find that answer in Luke 11:46 where Jesus, who could see the duplicity of constitutional lawyers, even then, had this to say to them:

"Woe to you lawyers as well! For you weigh men down with burdens hard to bear, while you yourselves will not even touch the burdens with one of your fingers.”

2000 years later, and they are still burdening the poor with burdens they will not carry themselves.

We will be short Philip. As we noted before, man has and is oppressed via 4 means:

(a) Fear of unknown.
(b) Thru violence.
(c) Thru land monopolisation.
(d) Thru money monopolisation.

To establish the Kenyan State, untold VIOLENCE was used. With their swords still dripping with the blood of the innocent, they proceeded to write laws meant to maintain the colonial system through the monopolisation of money and land. Today, when you try to challenge these monopolies, they retrieve the sword.

Essentially, we are faced today with the debate about whether the earth is flat or round.

As long as men believed earth was flat, they would go nowhere. It was only when men changed their belief system and realised earth is "round" did they go places.

Here we are saying this. At the CORE of all we do in constructing civil governance, we must have land and money at the CORE. In other words, earth is round.

You and the supporters of this new law are saying, we need some improvements and some good leadership. In other words, the earth is flat. We say, no, put land and money at the centre and all will fall into place.

We think this guy captures what really happening today all over the world very well.

http://www.youtube.com/watch?v=sLCEXtpTNYU&feature=channel

Anonymous said...

@ Mwarang'ethe

I'm Anon @ 8/31/10 5:29 PM. I forgot to add that owners of idle land in the outskirts like myself have refused to sell / develop because we're waiting for the bypasses to be ready so that our tax-free capital gains can spike even further.

Even after the bypasses are ready, we'll refuse to sell / develop until the Machakos technopolis is done. Even after that, we'll refuse to sell / develop coz it's easier to just wait for the land value to appreciate instead of the headache and costs of developing.

To avoid such an injustice, we need to have a LVT now. This will force me to sell / develop otherwise I won't bother.

That's why you must not give up the fight for a LVT. We must do what's right.

Try talking to the finance ministry to see if our great country can have a LVT in the next budget. The government wouldn't agree to have LVT as the only tax because it hasn't a clue if the revenue targets would be met. So it'd initially have to be an advance tax. Over time it'd become a final and only tax.

Make sure you're humble, soft-spoken and non-confrontational when lobbying. Trust me, wazees love that. Good luck!

Anonymous said...

To philip and his fellow religionists, here is the best descrption of prayer i have seen. "prayer is a useless exercise undertaken by those who, in a fit of childish delusion, believe they can effect changes in the real world by falling to their knees and murmuring to themselves" - Dan Ferris. When you pray you do nothing.

Anonymous said...

Bloody hell! If some more tax is slapped on 'poor' fishermen, all they have to do is to raise their prices kidogo 2 recoup that stupid tax increase. What's the effing big deal about that? Earlier this year I paid an effing 700k duty on my state of the art automobile and when I bloody moaned that the effing tax was too high, the effing custom's guy threw a hearty laugh and said it wasn't even enough to pay an effing MP for even one effing month! Bloody Uncle Sam! F***ing all our wallets effing dry! The sad reality is there's nothing to show for the taxes raised! What an effing banana republic we live in!

Anonymous said...

Mwarangethe,

R u a conspiracy theorist? Just wondered.

Do you want to use Kenya as a lab rat to test theeries that don't exist anywhere else?

Be honest, but I have faith in some of the stuff you are educating us on.


We need land value and property taxes ASAP.

Anonymous said...

Anon 3:38 AM

RE: Mwarang'ethe.

Borrows a lot of ideas from various schools of thought, however, some of his/her comments, call them "original ideas" if you will, are not always clear but fuzzy to say the least.

S/he likes comment on certain issues or specific problems but never gets further in actually solving them or even providing any "original" workable solutions or concrete proposals.

RE: Phil.

On the other hand, Kumekucha has yet to read any of anon 3:38 am's contributions as in well thought out ideas.

Phil does not suffer from any confusion or known disorder, unless you want to resort to the old drama of the kettle calling the pot black.

My 2 cents comment on the "missing the boat" analogy. To the best of my knowledge there is no way a captain, sailor, docker or an individual can miss a boat by two rivers" other than by nautical miles or sea miles.

Nothing personal but the figure of speech sucked.

Anonymous said...

Anon 5:59 AM

"Different strokes for different folks".

Organized religions, communial prayers and personal spirituality may not be your cup of tea, and rightly so, but prayer does work wonders in the daily lives of millions of people around world.

Stick with what works best for you in good times, in not so good times, in bad times and in the worst of times.

All roads of our lives do lead to the same destination marked "death" at one point or another. Everything else is reletaive and just a matter of perception.

Insults are uncalled for and very unnecessary.

LOL! What's the befitting epitaph for folks like Dan Ferris?

Anonymous said...

LVT is not some experiment with Kenya as the lab rat as some people are alleging. Please read up at the following page.

http://en.wikipedia.org/wiki/Land_value_tax

Anonymous said...

I think a 3% LVT is quite reasonable. So an acre in Karen that's valued at KSh 15m would attract a LVT of 450k pa or 37.5k pm. If you put up a digs on the acre and rent it out for 150k pm, the LVT works out to 25% of rent. Si mbaya so long as there are no other taxes in the economy or the LVT is an advance tax.

An acre in Westy that's valued at KSh 150m would attract a LVT of 4.5m pa or 375k pm. If you put up 24 digs on the acre and rent them out for a total of 1.44m pm, the LVT works out to 26% of rent. Si mbaya again so long as there are no other taxes in the economy or the LVT is an advance tax.

35% of the Hong Kong government revenue is from LVT.

http://en.wikipedia.org/wiki/Land_value_tax

kumekucha said...

What Philip is saying makes plenty of sense to me and in my opinion Mwarangethe skirts round the main issues Philip has raised and just refocuses and re-enforces his own ideas.

Some of the things Philip said:

"My arguement is that you cannot implement what people don't understand..."

"Further you need to appreciate that we have made a little stride forward since 2002 and they are areas in our constitution which will make us move slightly forward again. But when you thrash everything it creates a mood that what we are doing will never benefit us at all yet some of us are benefiting from it. I will wish that your mood is about how to improve our lives for better rather than how to completely change our lives for the better."


What Philip is saying is that to do anything you need to start somewhere but the Prof's approach seems to be to burn everything and then rise up from the ashes to the perfect.

But is this practical? For instance had we trashed the new constitution (as he advocated) would it have been practical to create a new draft with Mwarangethe's even more radical (read contentious to many people) suggestions? Would it have been voted through?

In my view what we did has taken us a step closer to changing our land laws even more tradically in the future. Like most things in life it all happens with baby steps.

It would be nice to get a comment on this from Mwarangethe.

Chris

Anonymous said...

Chris said;

What Philip is saying is that to do anything you need to start somewhere but the Prof's approach seems to be to burn everything and then rise up from the ashes to the perfect.
-----------------------------------
My very humble submission is that Chris is deliberately twisting what Mwarangethe has been saying and rebranding it burn everything and then rise up from the ashes. Never in Mwarangethe's many articles has he advocated for scorch earth policy. He has articulated how through wise constitutional making you can enable hardworking Kenyans to create wealth and has extensively addressed areas of land, central bank, e.t.c.
Either, Chris you have not been reading or you have decided to start a propaganda war against Mwarangethe's ideas same wayour politicians do when their 'rocking chair' ideologies are exposed I guess to protect your diminishing territory of ignorant Kumekucha readers.

Once again I plead with Mwarangethe to ignore these unnecessary roadblocks that he will experience from the population of aging Kenyans who loath and detest change. Unfortunately, Chris belongs there.

Philip said...

Mwarangethe

I think if you start thinking of 'how I am going to implement my theories?' then you'll get me. So far I've not said your theories are bad, infact in many cases I've agreed with them but then if theories remain just theories without any plan to implement it, then of what use is it to us?

Maybe the first step you should concentrate is to educate us. And such education should be done in a balanced and polite manner coz you don't educate people by criticism and insults only but also by constructive debate which involves answering our questions and dealing with our concerns rather than circumventing through our concerns or dealing with a small issue like 'not asking for perfect constitution' to thrash everything else.

Unfortunately for many of your responses to my arguements this is the direction you have always been taking - dealing with one issue or weakness to thrash everything else.

Philip said...

Mwarangethe

I'm also reading LVT in Wikipedia. I'm surprised that this is something that has been practiced before. It's something someone had mentioned before. If it has been successful then why isn't it practiced elsewhere? Maybe because of lack of support.

This takes me back to previous discussion when someone mentioned to you about 'theories that are collecting dusts in government shelves'. Unfortunately you also thrashed the guy and all I remember now is that the thrashing was sort of at the same time despising likes of Anyang Nyongo (I need to be corrected).

I might not be surprised if I found out what you are advocating or your theories have been told before and thesis have been written which are collecting dusts in government shelves or universities libraries.

That's why I encourage you to go another step and think of implementation of your theories.

Mwarang'ethe said...

Chris wrote

But is this practical? For instance had we trashed the new constitution (as he advocated) would it have been practical to create a new draft with Mwarangethe's even more radical (read contentious to many people) suggestions? Would it have been voted through?

xxx

This is where we differ bwana Chris and Philip. From our point of view, we did not just want to have a new constitution just for the sake of it.

The sole purpose of the constitution was to give us a road map to a peaceful and wealthy nation.

Let us put matters this way. Our vision was to lay a firm foundation for attracting FINANCIAL CAPITAL and INDUSTRIAL CAPITAL so as to INDUSTRIALISE the nation in less than 10 years.

So, if that is what has been the motivating factor/vision on our part, what is yours and this constitution?

xxx

Philip said...
Mwarangethe

I think if you start thinking of 'how I am going to implement my theories?'

xxx

We also ask thee, now that you know of these theories, what are you doing to implement them?

xxx

In my view what we did has taken us a step closer to changing our land laws even more tradically in the future. Like most things in life it all happens with baby steps.

It would be nice to get a comment on this from Mwarangethe.

xxx

We have demonstrated for all here that, the cause of poverty in Kenya is the present taxation system and monopolistic money system and is not "poor leadership."

Now, if you believe this new law is good, please educate us:

- How does an increase in the number of mps which calles for more taxation upon the poor, lead to eradication of poverty?

- how does an increase in women mps which will tax women more, lead to the improvement of women?

- how does a constitution of another parliament at the county level with 47 governors which calls for increased taxation without additional wealth, lead to less poverty?

- Let us take the Embu county. How does making Nyaga's sons or Musyimi translate to a better Kenya?

- how does giving CORPORATIONS constitutional rights as if they were human beings lead to poverty eradication when we know corporations are the enemies of mankind?

For the welfare state, we ask it this way. We have three guys. Chris, Philip and Phil. Chris is a poor fellow.

To "help" him, the GOK promises to give him kes 1000 every week. The GOK then goes ahead and tells Chris this. On every 27th of every month, go and knock on Phil's and Philip's door and demand from them each kes 500.

Do you think Chris would go to Phil and Philip and demand kes 1000from them each month? Since he is a decent man, he will see what this is, robbery.

However, Chris is a "smart" fellow so, he asks the GOK to collect the kes 1000 from the two rich fellows and give him.

So, if that is the meaning of welfare state, how does that contribute to welfare of Phil and Philip and even that of Chris?

Anonymous said...

Phillip,
All you long stories were just to defend your kin anyang nyogo nyogo??
Eti Mwarangethe's ideas are gathering dust elsewhere...leta ingine and while at it why dont youy quote exact thesis or reports from which mwarangethe is drawing his arguments from??

I know you are jealous that at least Mwarangethe can think unlike you and kina Taabu..so you want to make it look like he copies somewhere...what a silly and weak argument.

Please come back when you are sober coz whatever stuff you are taking is making you talk matope.

Anonymous said...

Anon 8.02am

Yes I know prayer works, but exactly as Karl Max said it would work ie as a drug. As long as people believe the supernatural works, they will not do anything for themselves, like try some of the ideas am seeing here. You are right about all roads leading to death, but we should strive to be happy here on our little blue planet: by having the high quality life we all desire. Such a life cannot be achieved thru prayer ie. by doing nothing.

Mwarang'ethe said...

Philip, Chris et al

Just to add something on the "welfare" State we are embarking on.

On 1st Sept. 2010, the IMF published a paper on the "long term" outlook for Western welfare States.

You need not read the whole damn thing, just scroll to PAGE 18 and see the graph of expected public debt by 2030 which is just 2 decades away.

Therein, you will see the end of all welfare states/socialist States not only today, but, in history as we saw with the Roman Empire.

http://www.imf.org/external/pubs/ft/spn/2010/spn1013.pdf

Mwarang'ethe said...

Sorry, something wrong with that link:

http://www.imf.org/external/pubs/ft/spn/2010/spn1013.pdf

Mwarang'ethe said...

It seems the site is cutting some of the letters to the link. Please search under this then:

Long-Term Trends in Public Finances in the G-7 Economies by Carlo Cottarelli and Andrea Schaechter

Mwarang'ethe said...

For more insight on the perils of the "welfare state" we have adopted, please watch ASCENT OF MONEY by prof. Niall Ferguson of Havard @

http://video.pbs.org/video/1173188365/

There are many factual errors and ommissions by this prof. but, it will show anyone where we are headed.

Ivy League said...

@Mwarang'ethe ......Kindly Point out this 'factual errors' from the Harvard University Professor.

Anonymous said...

I am yet to hear of practical solutions to this 'double Tax'...

Kenyan's are amongst the highest Taxed citizens worldwide, Kibaki once said it while he was opposition C.E.O and now he is the C.E.O of the country and the same 'High' taxes exist.

Being the 'Brilliant' economist that he is usually reffered to, I believe we should have some form of Tax reprive, but good old Emilio has a chock hold on us.

Mwarang'ethe said...

Ivy League said...
@Mwarang'ethe ......Kindly Point out this 'factual errors' from the Harvard University Professor.

9/2/10 4:16 AM

xxx

So much to be said really.

This guy, is another COURT/ESTABLISHMENT historian. His job is to DESCRIBE the bad situation, and then, convince the SHEEPS that, it is just the way things work, or should work.

For instance, he says Japanese pioneered welfare state. Wrong. If we are to be honest, we must start with Roman Empire welfare. We would expect a Havard prof. to know these facts.

If we come to modern era, then, we must travel to Germany in 1870's. We must also travel there to meet the founders of communism, i.e. Karl Marx, Engels and their teacher, Hegel.

When it comes to finance issues, he does not mention Bank of Amsterdam, Bank of England etc.

More so, the ascent of money/speculation is a reflection of a sick real economy. This he fails to connect the dots. For instance, as America DEINDUSTRIALISED, it resulted to paper speculation to maintain an illusion.

In fact, we are now aware that, we are moving $ 4 trillion every day for speculative purposes. Incredible and brave this world of finance we might say.

Again, on Japan, he dare not mention that, Japan has been operating a total war economy since 2 WW while being protected by the USA. Africans have never been allowed such luxuries. All, we have seen are snake oils called poverty reduction.

More so, he fails to mention the role and effect of Plaza Accord of 1985 as well as Basel Capital Accord issues.

On land, he fails totally to mention things such as these:

Flowing from the Plaza Accord, by 1990, Japanese total land value was 2, 389 trillion yes ($ 23.89 trillion).

In other words, due to massive speculation in land, due to low interest rates by the central bank, its land accounted for over 50% of all land surface while accounting for less than 3% of its total area. Isn't that interesting fact?

When it came to shares, they were trading at 305 times the value of corporate income by 1990's. What did brokers say about this? Well, they said high stock prices reflected HIDDEN ASSETS. Which assets were these? The land.

When this bubble was burst by their central bank as required by the Plaza Accord, Japan lost in land and stock values in just 3 years over $ 8 trillion.

In other words, LAND SPECUCULATION due to stupid land tenure and stocks due to funny monetary system, Japan saw destruction of "wealth" in a scale worse than the 2WW.

In other words, this guys carefully fails to link CENTRAL BANKS, LAND and TAXATION as fundamental errors of the modern states.

In other words, it for this careful avoidance of the key issues, he is promoted by the mainstream media to keep SHEEPS ignorant, but, productive offcourse.

By the way, the Japanese central bank just two days ago printed some more trillions of papers they call yen. It has been doing this since 1990 and still, nothing is working.

The idea this time was to lower the yen and increase the exports. The results were the opposite. But, at least Japanese can LOAN Kenya some of these useless papers in exchange for REAL WEALTH i.e. coffee.

And, we say we are improving with a new katiba? How can people who take useless papers in exchange for their real wealth say they are going somewhere? What a joke!!

Anonymous said...

Wow Mwarangethe you are loaded with information. I would like to know what you do for a living? Now, what is the way forward for Kenya in the wake of thie draft we have. You have to agree there are lots of things we got wrong but we have others we got right like governance and the system of checks and balances. Why not isolate the things we got wrong and formulate a series of amendments to be undertaken in like 10 years?? You also need to realize opposition to a proper constitution will come from all over moreso the wst because they will see right through it.

Anonymous said...

Mwarang'ethe,

Why am I not even surprised that you still shouting loud about Nyanza region falling victim to a double tax under the new constitution, while at the same time you have remained dead silent with regard to why Kenyans should continue to be blindsighted and overburdened every year due to unnecessary and overbloated defence budgets.

Nyanza and the Double Tax under the New Constitution.
------------------------------------------------------------------

... if it (ad valorem tax) is implemented properly [as is the currrent case in Namibia], it will not deter production, distort market mechanisms or otherwise create deadweight losses the way other taxes do.

Furthermore, the 'feared' avt will not plunge 88.99% of Nyanza's population deeper into the
pangs of abject poverty or deter economic growth that will be brought about by potential young enterpreneurs from the region.

Kenya's Overdue Defence Budget Cuts.
---------------------------------------------------------------------

With all due respect for the Kenya's military, I strongly believe that the time has come for patriotic minds at the M.o.D. and the very well informed adminstrators at the D.o.D to cut down on white elephant procurement projects as well as to drastically trim down the bloated payroll.

The post August 27th, 2010 era should be an opportune time for Defence Budget Cuts and the overdue reorganisation of the Kenya Defence Force (Kenya People Defence Force) as well as the Kenya Police Force.

Kenyans no longer live in the immediate post World War II era at a time when national armies heavily depended on foot soldiers as fodder to accomplish their battlefield objectives and military missions.

Modern times call for national defence forces to be lean and mean rather than carry around a lot of deadweight within their rank and file.

Further, the four decade old gross wastage of the nation's treasury on "white elephant procurement projects" should be curtailed forthwith, and the valuable resources redirected to where they are needed most in various regions of Kenya.

People and the infrastructure are more important than the ancient/used military hardware that continues to be imported at very exorbitant costs.

All that Kenya needs to have is a modern defence force that is efficient as opposed to one that is obsolete in 2010 and beyond.

BTW, the Uganda Defence Force is busy earning its keep thanks to Uncle Sam, as opposed to the typical old fashion method where African armies suck their nation's coffers dry.

Anonymous said...

Mwarang'ethe,

Why am I not even surprised that you still shouting loud about Nyanza region falling victim to a double tax under the new constitution, while at the same time you have remained dead silent with regard to why Kenyans should continue to be blindsighted and overburdened every year due to unnecessary and overbloated defence budgets.

Nyanza and the Double Tax under the New Constitution.
------------------------------------------------------------------

... if it (ad valorem tax) is implemented properly [as is the currrent case in Namibia], it will not deter production, distort market mechanisms or otherwise create deadweight losses the way other taxes do.

Furthermore, the 'feared' avt will not plunge 88.99% of Nyanza's population deeper into the
pangs of abject poverty or deter economic growth that will be brought about by potential young enterpreneurs from the region.

Kenya's Overdue Defence Budget Cuts.
---------------------------------------------------------------------

With all due respect for the Kenya's military, I strongly believe that the time has come for patriotic minds at the M.o.D. and the very well informed adminstrators at the D.o.D to cut down on white elephant procurement projects as well as to drastically trim down the bloated payroll.

The post August 27th, 2010 era should be an opportune time for Defence Budget Cuts and the overdue reorganisation of the Kenya Defence Force (Kenya People Defence Force) as well as the Kenya Police Force.

Kenyans no longer live in the immediate post World War II era at a time when national armies heavily depended on foot soldiers as fodder to accomplish their battlefield objectives and military missions.

Modern times call for national defence forces to be lean and mean rather than carry around a lot of deadweight within their rank and file.

Further, the four decade old gross wastage of the nation's treasury on "white elephant procurement projects" should be curtailed forthwith, and the valuable resources redirected to where they are needed most in various regions of Kenya.

People and the infrastructure are more important than the ancient/used military hardware that continues to be imported at very exorbitant costs.

All that Kenya needs to have is a modern defence force that is efficient as opposed to one that is obsolete in 2010 and beyond.

BTW, the Uganda Defence Force is busy earning its keep thanks to Uncle Sam, as opposed to the typical old fashion method where African armies suck their nation's coffers dry.

Anonymous said...

@ anon 7:29, we may just need the "cannon fodder" sooner than you think. In case you are not aware, al shabaab declared a jihad against Kenya on feb 2010. The 2009 census then brought up an interesting anomaly in NEP. Oparanya mentioned men were 3 times the number of women in the nullified districts. Later the actual breakdown of the figures was 1.2m men to 1m women (forget for a moment projected numbers since '99 census should be at 1.5m combined max). Against the forces of natural attrition we therefore have 2-300,000 males above & beyond what would normally be expected. Coincidence?

If these are indeed real people & not phantoms created to artificially boost numbers, don't be surprised if we end up with a second "Shifta" skirmish that will need plenty of boots on the ground.

Bobby6Killer

Anonymous said...

@ Mwarang'ethe,

Questions,

1) Do you think the most efficient way to allocate capital is through capital markets? i.e. stock exchanges

2) Do you think capital markets are efficient?

Mwarang'ethe said...

Why am I not even surprised that you still shouting loud about Nyanza region falling victim to a double tax under the new constitution, while at the same time you have remained dead silent with regard to why Kenyans should continue to be blindsighted and overburdened every year due to unnecessary and overbloated defence budgets.

xxx

You still do not get it.

As long as the State has a printer for printing money, there is ABSOLUTELY no control the citizens can have over their government.

It is either, you constitute a government as a servant, or, as a master. So far we think being slaves to those who "govern" is the way forward. We disagree.

As Americans separated State and Religion, a time will come when money and state shall have to be separated as Americans had intended.

We would even argue that, our military is better when compared to our "friend" the USA. Sample this:

(a) Out of $ 8.7 billion for Iraq "reconstruction," 96% cannot be accounted for. Yes, we mean 96% was stolen.

See the story here:

http://boingboing.net/2010/07/28/where-did-the-money.html

(b) A day before 9/11, Pentagon Chief, Rumsfeld told us this. $ 2.3 trillion could not be accounted for in 1 yr alone.

See it here:

http://www.youtube.com/watch?v=_rRqeJcuK-A&feature=related

and

http://www.youtube.com/watch?v=3kpWqdPMjmo

When the whole truth will be known, the world will be stunned for never has such robbery been accomplished in human history on people who think are in control cos they vote every 4 years for one of the parties when all serve the same master. A serious joke!!

Anonymous said...

I thought country governments have the power to introduce new tax laws such LVT?

Anonymous said...

Ofcourse they do. But government is made up of the wealthy landed gentry & those who intend to join the gravy train. They are highly unlikely to tax themselves for the man on the street's benefit

Bobby6Killer

Eric said...

Now that the fishermen are expected to pay 'double tax'... There is still hope seeing that aquaculture if the statistics are believable has massive potential..

Kenyan's still continue to heavily rely on Agriculture as a source of Income and close to 3/4 of the population rely on it. With agriculture accounting for an estimated $800M.

The disparity comes in when Tea accounts for 2/3 of agri-exports. Their are other cash crops which farmers can grow to balance off this skewness.

My 2 cents worth for the Lake basin inhabitants, the fishing industry may require;

1. A schedule of available resources in Lake Basin region and also look at the untapped potential of aquaculture nationwide
2. The needs of the Lake basin people- with a deliberate attempt on the part of the county government to make best use of the resources with the objective of maximizing the economic welfare.

3. Execution of the plan with the help of the state, if need be.

Anonymous said...

mwarengethe,

i know you have trashed our 'new-born' baby at every opportunity can you join the rest in moving on...bado unaota mambo ya provinces. ati nyanza? wapi uko?

Anonymous said...

Telling a county government to introduce LVT is akin to stopping a stubborn horse that has already bolted from its stands. Its messy, dangerous and futile.

Kumekucha Prefect

MOTHUFARE said...

"If we come to modern era, then, we must travel to Germany in 1870's. We must also travel there to meet the founders of communism, i.e. Karl Marx, Engels and their teacher, Hegel."
It was all wizardry: http://www.marxists.org/reference/subject/philosophy/works/en/magee.htm

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