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Politicians Beware: Romania’s Witches Resent Being Taxed

August 28, 2011

This story about Romania taxing its witches, (and the witches fighting back), appeared in the Associated Press in January of 2010 turned into something of an internet sensation.   In many ways, it seems to be telling a unsurprising story: A desperate government seeks new sources of revenue.  Outraged citizens protest that their taxes will increase.    So, why all the fuss?   Most notably,  the outraged citizens are witches: self-proclaimed, proud, and sincere practitioners of what are called the “dark arts.”  Moreover, to show their outrage, they intend to curse the politicians who will tax them.

But first, a little background on the story is in order.  Romania’s government had recently experienced a severe budget crisis as a result of the Great Recession.  They, of course, were not alone: the UK, Ireland, Greece, Spain, Portugal, and Iceland, to mention just a few, experienced combinations of internal and external debt that threatened to bankrupt each country.  Romania, like others, requested loans from the International Monetary Fund.  The IMF, in turn, would only lend to Romania if it proved creditworthy, which meant slashing government spending (on the salaries of teachers and doctors, for example), and raising taxes, including the VAT.

It was then noted that some professions, like embalmer, driving instructor, and witch were left out of previous labor listings.  In other words, their jobs did not exist, according to the government, and therefore could not be taxed.  And so it came to pass that the government announced plans to add them to the rolls, and to begin taxing their income the following year.

Furthermore, as a resident of Bucharest, the tax on witchcraft appears to be a cynical attempt to appeal to anti-gypsy resentment, a feeling that runs high here.  It would be as if the US state of Louisiana were to suddenly start taxing the practice of voodoo, what happens to be a cultural and religious practice of the Creole people who have lived there for centuries.

TOK-related Discussion questions:
1.  Most government leave such activities to the “informal” or “parallel” markets.   Is Romania justified in levying this tax?

2.  One witch, quoted in the article, did not mind the ruling because it gives her profession some legitimacy in they eyes of the state.   Romania, as many countries do, offer tax exemptions for religious organizations.  To what degree could their profession qualify for tax exemptions in this fashion?

Application questions:
1.  Assume that the government chooses not to tax incomes but the services themselves with an excise tax.  For example, say the government taxed each “hex” placed on behalf of a customer at 20 RON (about 5 euro).  Using a diagram, show this tax on a diagram with an average price of 100 RON (abut 25 euro).  Show the respective producer and consumer burden, along with the area of deadweight loss.

2.  Assume that during an economic expansion, the demand for curses is strong because of competition between businesses (and perhaps politicians), and demand is relatively inelastic.  Explain how your answer to number 2 might change as a result

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12 Comments leave one →
  1. akumar13 permalink
    November 14, 2011 4:17 pm

    1. Most government leave such activities to the “informal” or “parallel” markets. Is Romania justified in levying this tax?
    – If they want to acknowledge more professions to actually be considered “professions” then they should. This will further increase the amount of income tax Romania receives. However, witchcraft isn’t exactly a profession as there is no salary given to a witch. Imposing a tax on witchcraft is like imposing a tax on a religion or a social way of life, such as Taoism. However, it may allow the followers to make a living for themselves as it isn’t correct to impose a tax on a profession in which the workers don’t get paid a salary. It could benefit both parties, as the government will make a profit, and witchcraft will be recognized as an actual profession.

    2. One witch, quoted in the article, did not mind the ruling because it gives her profession some legitimacy in they eyes of the state. Romania, as many countries do, offer tax exemptions for religious organizations. To what degree could their profession qualify for tax exemptions in this fashion?
    – It does give her profession some legitimacy, and if enough people are followers of witch craft, it could be considered a religion, but I don’t think that will happen in Romania due to all the racism here. Even the government is corrupt, so personally, I don’t think that witchcraft really has much of a chance to qualify for tax exempt status. The article even said that the witchcraft seems to “appeal to anti gypsy resentments”. Although, if the government did decide to grant this group of people tax exempt status, they should also try to lessen the hatred towards these people and the Roma population in general.

  2. rshimony13 permalink
    November 14, 2011 4:34 pm

    As a person who disbelieves in the types of “dark art” I think Romania is justified to collect taxes from the “witch business”. If a bakery is taxed as an ad valorem tax, then so does this service need to be. This is not a religious organization and therefore should be taxed as a regular service. To some extent the witches will benefit from the taxations because the government would enlist it as any other service, like a bank, law firm, fast food etc. This will probably increase the demand for the witches services, and at the end of the chain, their total revenue would increase as well and thus profit from the taxations. The witches profession could to some degree qualify as a religious organization (I personally disagree) because it is what these people believe in and they follow their believes.

  3. Rachel Morris permalink
    November 14, 2011 5:00 pm

    I suppose the Romanian government has a right to tax the self-proclaimed “witches” if they are making a heavy income. It all depends on how much they are receiving per year. If they don’t make a large income, then I don’t think they should be taxed. However, if some taxation on the witches would cut some of Romania’s debt, than it might be necessary. I think the witches would qualify as a religious organization. Even though I may not believe in curses or voodoo, it is something that others strongly believe in. In that case, some tax exemptions should be offered.

  4. ejamnik13 permalink
    November 14, 2011 5:55 pm

    I don’t think that Romania is right in imposing this tax. The salaries of government jobs are decreasing so much, and of course Romanians are going to be outraged. In my opinion anyone with income should pay, however, rich people and wealthy markets should pay more than poor people and low revenue markets. The government is not taking into count that some people might not have the money to pay such taxes, and they (witches) are very sensitive to this tax change. That person, witch, does not pay taxes because Romania gives the religious organization an exception to paying taxes. Unless the work is fairly generous, and is based on a belief, it’s fair to pay taxes to eventually increase the government’s revenue.

    • ejamnik13 permalink
      November 15, 2011 5:05 pm

      I misunderstood the article. I thought it the “witch” part was a metaphor.
      However, I still agree with the first point I made, Romania is not right in imposing those taxes on the people without much money left. In my opinion, witches or any religious organization should only be tax-free if people donate money to give the organization some profit. The fact that witches don’t need to pay taxes is not very rational because they do get an income based on people paying them for fortune telling etc… I believe that whoever gets an income should pay taxes, and I don’t see magic as a religious act.

  5. Maximilian Petre permalink
    November 14, 2011 6:34 pm

    When a government is struggling, and has an increasing budgetary deficit it will try to take money from everywhere it can, and thus they have started taxing the witches. Romania is justified in levying this tax because if another business has to pay money to the government for doing business, the witches should pay as well. The fact that Romania cannot really control the witchcraft business as well as it can control a stationary business such as a hotel is obvious, but those that do get checked either will pay a fine and contribute to the government or start paying their taxes. In the end they also benefit from the money which is used, theoretically at least, for example for building roads.

    Depending on the type of witchcraft a witch practices defines to what degree the witches’ profession could qualify for tax exemptions for religious organizations. A witch, who for example makes a prediction for you, basically provides you as a consumer with a service, so therefore there should be a tax like on any other service. This is also why the government is trying to implement a law which says if a prediction goes wrong you can take a witch to court. If you go to a witch because you believe in magic, and you go because this is your belief that there are certain people who control us, and you basically make a donation, that could get some tax exemption because you are donating money, and it is similar to someone donating money to the church. For someone to cast a blessing on your house there should also be tax exemptions for witches, just as there are for the money you pay to priests for blessing your home.

  6. Maximilian Petre permalink
    November 14, 2011 6:48 pm

    When a government is struggling, and has an increasing budgetary deficit it will try to take money from everywhere it can, and thus Romania has started taxing the witches. Romania is justified in levying this tax because if another business such as a hotel has to pay taxes for doing business, the witches should pay too, although they cannot be as easily controlled. The witches in the end also benefit from the government money which is spent for example towards building roads (at least theoretically).
    The type of witchcraft a witch practices should define to what degree the witch could qualify for religious tax exemption. Witches providing you with predictions are basically providing you as a consumer with a service, which is contrary to you going to a witch because you believe in magic, and making a donation, because this is similar to donating money to the church.

    (sorry for the previous comment, i forgot it had to be between 100-150 words)…

  7. jbrown13 permalink
    November 14, 2011 7:03 pm

    If witchcraft is to be regarded as a profession, than I think taxing the witches income is justified. If witchcraft is their chosen source of income, than it is only fair to all other professions that they be taxed as well. Event though the size of their income is considerably smaller than other jobs, a tax is still justified if it doesn’t take away from all of their income and also recognizes witchcraft as a real profession. If the witches are receiving income from their witchcraft, just like a doctor receives income from healing people, then the tax is justified. However if the witchcraft is purely a hobby and is viewed as a tradition, than I do not believe the tax is justified because it would be like taxing people to participate in traditions. I do not believe that witchcraft qualifies as an organized religion, and therefore do not believe that it gives it the right to tax exemptions.

  8. Judith R. permalink
    November 15, 2011 4:13 pm

    The moment Romania recognizes witchcraft as a profession it has the right to place a tax on the witches, in the same way it imposes taxes on other professions. If witchcraft is the actual main source of income of some people then it is part of their obligation to the state to contribute a part of their income and help Romania overcome their budget crisis. However, if some people only choose to perform witchcraft as a hobby rather than an actual profession and main source of income, taxing these people is unjust because the financial benefit they gain is very limited. Witchcraft could be considered a religious organization, as it is belief and something we chose to belief and participate in but I personally do not believe in these tax exemptions. If everyone else paying income taxes then why shouldn’t the witches?

  9. Anonymous permalink
    November 16, 2011 5:42 pm

    It is of course beneficial in terms of tax revenues for the government if it finds as many professions as possible to be considered as real and legitimate professions. In this case it is however questionable if witchcraft is an actual profession, as it is more like a way of life, religion or simply superstition according to me. I believe however that the question we should ask ourselves is: how big is the market and how much money does it involve. If witches actually do profit and if this is a market of at least some significance, it might be a good idea to impose taxes on these services in order to increase government revenues. Romania, which is a country that offers tax exemptions for religious organizations, should not give witches the same perks, unless witchcraft clearly is considered to be a religion.

  10. Ansgar Bengtcén permalink
    November 16, 2011 6:21 pm

    It is of course beneficial in terms of tax revenues for the government if it finds as many professions as possible to be considered as real and legitimate professions. In this case it is however questionable if witchcraft is an actual profession, as it is more like a way of life, religion or simply superstition according to me. I believe however that the question we should ask ourselves is: how big is the market and how much money does it involve. If witches actually do profit and if this is a market of at least some significance, it might be a good idea to impose taxes on these services in order to increase government revenues. Romania, which is a country that offers tax exemptions for religious organizations, should not give witches the same perks, unless witchcraft clearly is considered to be a religion.

  11. ssinha13 permalink
    November 16, 2011 7:07 pm

    Levying this tax seems economically viable for Romania, because like many other countries, has debts to pay off and if witchcraft is going to be considered a profession and people are willing to pay a substantial amount of money to receive their service, it would seem reasonable to place taxes. This way Romania would pay off their debt quicker and the “market” size may not necessarily shrink, but wouldn’t grow as much.
    If the citizens of Romania are willing to donate money for their services in return, as they do for religious organizations, then their profession could qualify as a religious organization. However, the wtiches do not comprise a religious entity, but rather a superstitious one, and so once again it would seem reasonable to levy taxes on the “dark arts”, since tax exemptions are only for religious organizations.

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