More Taxes are a Good Thing ... For Governments

And apparently for bureaucracies in general, including those of international organizations; an "expert" from the Inter-American Development Bank is supporting tax reform in Costa Rica.

Monday, November 14, 2011

Although officially the IDB "does not advocate a tax burden or specific tax policy," one of its officials warmly supports the project to increase the tax burden to support the Costa Rican economy, to the point of suggesting that the tax burden be similar to Argentina’s.

An article by Mary Anastasia O'Grady of The Wall Street Journal recalls Alexis De Tocqueville's warning that democracy can only survive up to the point at which "politicians realize they can bribe people with their own money", noting that now these politicians contend with the "poisonous influence of multilateral institutions such as the current Inter-American Development Bank (IDB)."

O'Grady points out how "the gap in education and health previously observed between Costa Rica and the rest of the region is disappearing and the Tocqueville effect seems to be at the heart of the problem."

"Chinchilla’s party is rubbing its hands at the prospect of new revenue and the IDB is feeding the frenzy. In September $609,000 was approved for a project that, according to information on its website, will 'support' the 'implementation of the proposed tax reform’. The agency says that the way they will spend the money has not yet been made public information."

"De Tocqueville saw the danger in all this: 'The history of liberty is a history of limitation of government power, not its increase.' But even he could not have anticipated this government excess stimulated by the IDB."



More on this topic

Tax Reform Being Prepared in Guatemala

July 2016

Raising VAT from 12% to 15% and lowering income tax from 35% to 30% are part of the reforms that the Executive Branch is preparing to present to Congress.

Preliminary ideas being prepared by President Morales and a group of advisers also include incorporating the concept of world income. Although a formal document has not yet been submitted, the Executive has already started to give details of the proposal to members of Congress.

International Bureaucrat Promotes Greater Taxation

April 2011

An international bureaucrat, whose salary is exempt from paying taxes, is one of the main supporters of tax increases in Costa Rica.

Alberto Barreix, tax expert from the Inter-American Development Bank (IDB), boasts that he has supported more than 50 tax rises in various countries.

Nicaragua will improve tax collection and improve social spending with IDB assistance

December 2009

A $40.5 million loan will prevent deterioration of fiscal situation due to the global recession.

The Inter-American Development Bank approved a $40.5 million loan to that will provide budget support for Nicaragua and help finance measures that will increase revenue collection and efficiency and transparency of budget execution.

Costa Rica Should Increase Taxes

July 2009

The World Bank recommended the country to increase its taxes, because they are insufficient to cover its high level of public spending.

The coordinator at the International Development Bank, Ana Lucía Armijos, indicated that Costa Rica uses 17.3% of its gross domestic product to social spending. After Argentina, Brazil, Chile and Uruguay, it is the country that invest the most in this area.

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