HeLA Economics

right livelihood

Hela Economics is based on the practice of Right Livelihood. Right Livelihood is an important part of the Buddhist tradition. Right Livelihood Economics has been practiced in Heladiva for over 2500 years. To understand Right Livelihood Economics, one must know the terms of dhamma, dukkha, the Four Noble Truths and the Nobel Eight Fold Path. Right Livelihood is a part of the Noble Eight Fold Path that leads to the cessation of dukkha ('sorrow'). The explicit don'ts of Right Livelihood are the trade in arms, the trade in human beings, the breeding of animals purely for slaughter, the trade in intoxicants and the trade in poisons. The do's of Right Livelihood are broad and outlined below.

Right Livelihood Economics

Right Livelihood Economics is based on the principle of 'Right Livelihood'. Right Livelihood Economics is about 

• the purification of the human character (do no harm and do good), 

• developing one's faculties (strengths)

• achieving wisdom (knowledge and skillful practice), 

• simplicity, 

• moderation (avoiding extremes) 

• self-sufficiency (sustainable prosperity) and 

• equity (equal opportunity). 

Efficiency in this economic system can be defined as maximum wellbeing with minimum consumption. 

The acquisition of wealth righteously and diligently is encouraged in Right Livelihood Economics. 

Wealth in Right Livelihood Economics enables a person to:

1.  Be financially independent with sufficient income to support one's needs and wants, and that of one's family and employees.

2.  Share one's wealth with friends and associates.

3.  Ward off unexpected events such as natural disasters, theft etc.

4.  Share wealth with relatives and guests, and be charitable.

5.  Help those who have strayed from morality (SILA) to rise.

Sovereign Enterprise

A sovereign enterprise enables a person to practice the concept of Right Livelihood freely. A sovereign enterprise is a small business where the owner (a Sole Trader) is free to utilises and develop his or her own faculties to bring forth goods and services for a becoming existence. A sovereign enterprise uses intermediate technologies on a human scale to achieve this end. Sovereign enterprise is at the heart of Right Livelihood Economics.

TAXATION in RIGHT LIVELIHOOD ECONOMICS

Among other things, Right Livelihood Economics is characterised by self-sufficiency (sustainable prosperity), equity (equal opportunity) and simplicity. Taxation therefore needs to be simple but this is not the case in many countries, including Heladiva. In fact, its complexity has allowed some rich individuals to employ tax accountants to minimise their tax or avoid it all together.

Simplifying tax begins by removing all existing taxes (income tax, payroll tax, land tax, inheritance tax, death tax, stamp duty, capital gains tax, excise tax, sales tax, GST/VAT etc.) and replacing it with one simple universal tax called the Transaction Tax. 

This means that every financial transaction between two or more entities is taxable. The taxation rate is 20% and the entity that receives the money pays the tax. It is simple and effective on many levels.

• For example, if an employer pays and employee LKR 100,000 for their labour, then the receiver of the money (i.e. the employee) pays the 20% transaction tax (LKR 20,000) to the Taxation office. 

• For example, if a business's revenue (money in) is LKR 10,000,000 then the business (the receiver) pays 20% (LKR 2,000,000) to the Taxation office. Entities are allowed to include the transaction tax in the sale price of a good or service.

• For example, if someone sells their property, then the seller who is the receiving entity pays 20% of the sale price to the Taxation office as the transaction tax. Entities are allowed to include the transaction tax in the sale price.

There is no need to submit a complicated tax return. Each entity declares their income or revenue (instantaneously or daily/monthly/quarterly/annually (financial year) and pays 20% of income/revenue as the Transaction Tax to the Taxation office. There are no tax deductions to claim or tax rebates to be applied. 

Failure to pay the Transaction Tax by the agreed time, however, incurs a mandatory penalty that is 5 times the value of the due transaction tax. Repeated failure to pay the Transaction Tax may also incur additional penalties such as a lengthy imprisonment.

Mining companies are no exception to the transaction tax. As any other profit making entity they have to pay the 20% transaction tax. In addition to this, however, mining companies are also required to pay 10% of the value of the minerals they take from the Earth as a mining royalty payment. The mining royalty is not a tax but an annual remittance made to The People for appropriating what is the common wealth of the people for private purposes. In a similar way, all imported goods will have a 10% tariff (which is not a tax) in addition to the universal transaction tax. This is to stimulate local production giving local goods a competitive advantage and keeping people in employment and able to practice their right livelihood.

Government payments received by The People such as aged pensions, job search supplements, lottery wins etc. are not taxable because the Government and The People are considered as the same entity. Similarly, government salaries/wages received by individuals are not taxable for this same reason. Salaries/wages received from entities funded by the government, however, are subject to the transaction tax as they are not the same entity. Similarly, transactions between subsidiary companies and holding companies are subject to the transaction tax as they are not considered as the same entity. Money deposited in banks and other financial institutions by an entity under its own name is not subjected to the transaction tax, but the interest earned is. Money received through a bank transaction is considered income and is subjected to the transaction tax. Children under 18 years of age, approved charities and approved volunteer organisations are exempt from the transaction tax.

Taxation is vital for governments enabling them to provide infrastructure, services and enforcement needed for the economy to flourish. The transaction tax multiplied through the economy will create more wealth allowing for quicker debt repayment and higher standards of infrastructure and services for better livelihoods. Taxation in Right Livelihood Economics is simple and effective. A simple taxation system is transparent and easily accountable. A lower taxation rate of 20% allows for greater participation in the economy and sustains more livelihoods. It also has a feel good factor of giving 20% (1/5) of what you earn for the greater good (e.g. schools, hospitals, roads, defense etc.).