İHSAN YILMAZ

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İHSAN YILMAZ
February 01, 2013, Friday

Social (in)justice in Turkey

Finance Minister Mehmet Şimşek has responded to demands by the construction industry that taxes for luxury houses not be increased. He rightly stated that he would not allow the poor to subsidize luxury houses through taxes. As a matter of fact, this is not only about luxury housing. As I wrote here a few weeks ago, this is a systemic problem. We have all become neo-liberalists and social justice is only tangentially relevant to our system, our policies, decisions and even prayers.

Şimsek has said that out of all collected taxes, the corporate tax comprise only 2 percent and income tax only 4 percent for a total of total of 6 percent. In the EU, the average is 14 percent. In Denmark, it is 29 percent. Speaking in reductionist terms, from this perspective alone Denmark is a more Islamic country than Turkey. As I explained before, as a result of the intricacies of the Turkish tax system, while the poor give 60-70 percent of their income back to the state in direct and indirect taxes, the rich give only a few percent. For instance, take the issue Şimşek has spoken about: Up until recently, the buyer of a $1 million flat would only have paid 1 percent value-added tax (KDV) if the flat was less than 150 square meters; for a much cheaper houses, buyers would pay 18 percent KDV.

Though not identical, credit card rewards programs are another trick similar to this. A Turkish bank gives extra flyer miles to its credit card users when they make purchases on their card from participating companies. For instance, for every 100 liras one spends, one gets 10 liras from the bank -- money which can only be used to buy flight tickets. This is in fact paid by the company to the bank as commission. Thus, the bank does not lose anything. Then, when you want to buy a flight ticket, the bank buys a ticket for triple or quadruple the mile-liras you collected. Let us say you have collected 200 liras but are able to buy a ticket that costs 800 liras through the promotion. It would appear that the bank is losing out. But the bank claims the 800 liras back from the state in the form of paying fewer taxes as it is considered promotional advertising and thus a cost for the company. The bank even gets the money paid by the consumer (through commissions paid by the company to the bank). Normally, the bank only loses 600 liras but gets 800. What is more, while the state -- meaning the taxpayer -- is paying for the ticket, it is the bank that boasts to be helping credit card users. I am not an expert on this, though this was explained to me by an expert friend of mine. I hope that the finance ministry can check the accuracy and validity of this claim. However, since banks are huge and powerful in Turkey, the state generally turns a blind eye to their wrongdoings. This is only one example of that fact.

Turkey needs systemic measures to boost its social justice. At the moment it is understood in a very limited sense, confined only to some welfare state applications and charity for the poor. Yet there are huge and crucial issues such as the inhuman minimum wage, little more $400 per month, to the unjust tax burden on the non-rich -- such as white and blue collar workers and shop owners -- to a terrible income distribution. For instance, minimum wage is worse than slavery. Even a slave owner must give his slave the food he himself eats and the clothes he himself wears. It is obvious that with $400, one can barely survive in Turkey.

Nevertheless, the powerful elite including the academics, Islamists, practicing Muslims and others seem to be content with the status quo and are not spending their time and energy coming up with creative systemic solutions to the endemic problem of injustice in Turkey. Criticizing imperialism daily, cursing capitalism regularly, underlining the heinous inroads of the so-called World Order consistently and arguing that Islam is the solution are all extremely easy, cheap and shallow rhetorical acts.

Everybody, even I, can spot the problems. Yet what are the credible and feasible solutions? Until when will we continue to postpone pondering these issues? What are we busy with and how is our lifestyle and personal praxis?

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