The current government in Lebanon hit a brick wall this week when it tried to pass a tax bill aimed at funding long overdue pay raises to public sector employees and teachers. To fund the estimated $1 Billion needed to cover this expenditure, the government proposed no less than a whopping 27-tax increases across the board. No sooner had the laws been passed by parliament, with few objections, then dissent rose all over the nation.
Of course, proponents of the taxes tried to argue that anyone who opposes them is actually opposed to the pay raises themselves. They added that the pay increases will generate positive economic activity, far outweighing the potential cost of the tax. Prime Minister Saad Hariri, whose cabinet is behind the tax law, somewhat disingenuously invited anyone with a better solution to come to the seat of government and propose it. Those protesting the tax, appear to have taken up his offer, heading straight to the Saray to demand that the tax increases be abolished. They retorted that the state of the economy is in such shambles, any new taxes will hurt businesses, working classes, and the poor. “Go get your taxes from the multi-millionaires, not from those working two or three jobs to make ends meet,” they cried.
Somewhat lost in the ensuing mayhem are the following questions:
First, who gave this Lebanese parliament the popular mandate to raise taxes to begin with? After all, this parliament has postponed elections twice self-extending its term, and many are expecting them to do it a third time. And while some may dispute legitimacy, even if one were to assume it, at this point does anyone in the Lebanese parliament truly believe that they have any extra-ordinary popular mandate to carry out sweeping tax changes of such magnitude?
Second, where is the cabinet itself drawing its mandate from? In reality, it was voted in by the same parliament in question, casting doubt on its own mandate. But again, even if it’s given the benefit of the doubt, wasn’t the primary job of this cabinet simply to ensure proper parliamentary elections, paving the way for a new cabinet? Or is this Prime Minister under some illusion that his government has a popular mandate to pass any and all taxes necessary? If so, and judging by the immediate popular outcry, it seems the Prime Minister has miscalculated.
While constitutionally, some may argue that it is within the prerogative of both of these branches of government to pass tax laws, political savvy suggests carrying it through without holding a clear mandate would be unwise. Why? Primarily to avoid suffering the consequences of a popular backlash and the subsequent voter punishment at the ballot box. Unfortunately, at this juncture it seems the cabinet had not fully thought through the consequences of legislating without a clear popular mandate nor one strong enough to allow it to pass any substantial piece of legislation, least of all sweeping tax change.
This begs the third and final question: How can a mandate be retained? Quite simply through elections. In other words, the strength of a mandate is directly proportional to the proximity of the latest elections. The more distant the elections, the weaker the mandate. It is no wonder that Presidents and cabinets all over the democratic world usually begin with very strong mandates and end in what is typically referred to as “lame duck” rule. The same has been the case in Lebanon where Presidents and cabinets who begin with strong mandates, when controversially over-extended, typically face substantial erosion. And when this occurs, only immediately called-for elections renew the mandate.
As it stands in Lebanon, the repeated extensions of parliament’s terms have served to weaken its mandate as well as that of the cabinet. Under such circumstances, it is quite difficult to discern any sustainable scenario in which fiscally painful reform or new tax laws of any kind could withstand the inevitable popular backlash. As such, both the cabinet and parliament would be well advised to either change the tax base or shelf their tax plan altogether and call for fresh parliamentary elections as soon as possible. Nothing less will re-establish the pre-requisite mandate needed for real change.
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