"Free" in Hungary

Personal | 4/22/2023 | econjac

[econjack]

Recently, I was on vacation in Budapest, Hungary, taking one of those bus trips of the city. Our guide was a young lady, probably mid-20's, who spoke excellent English but had always lived in Budapest. We drove by a major university and she said that a college education was free in Hungary. When we drove past a large city bus stop, she quickly pointed out that it, too, was free. Finally, we drove past a large hospital where I was told that medical care was free.

Curious, I asked her what her income tax rate was and she relied that everyone paid a 15% income tax. Indeed, she made it sound like a true fixed rate with no deductions.

I asked if there were any other taxes and she said yes, there was a Value Added Tax (VAT) on goods and services. It's much like a national sales tax. The rate is 27% on almost everything. Lower rates (18%) applied to some fresh meat and dairy products and outdoor concerts (?). So, all that "free stuff" means the gov't takes 42% of everything you earn to pay for the "free stuff". Oh, and you can't go to college at all unless you pass a qualifying exam. And, if you need a heart operation, you get in line and wait up to 18 months to have the surgery...unless you die first.

As they say, there is no such thing as a free lunch.

[central_va]

Tariffs promote domestic industry, protect the US workforce and are voluntary, don’t buy, don’t pay. They are a WIN-WIN-WIN.

[BobL]

“Tariffs promote domestic industry, protect the US workforce and are voluntary, don’t buy, don’t pay. They are a WIN-WIN-WIN.”

Thanks, you did answer my question. I do think that the tariffs would be quite high, very high, it it became the primary funding of the government, though. And as the tariffs get higher, family spending power decreases, so there is a middle ground.