17-18% inflation, frankly I don't know where this number is from. Here's some recent sources mentioning 11-12%:
http://www.interfax.kiev.ua/eng/go.cgi?31,20051206003 http://www.interfax.ru/e/B/finances/26.html?id_issue=11420254
These people are obviously idiots by making predictions of 12% if according to you they're already way past that.
http://www.ukrnow.com/content/view/7102/ Inflation tallied 8.1% in January-October.
So, it's averaged out throughout the year (GDP, not inflation which is a cumulative). The 6.5% for January was either the actual growth in January or the projected growth for that quarter
(Picture of the GDP changes. Months on the X-axis; "112.1" reads as "12.1" growth; top line is for the year 2004, bottom line for 2005)
yes I know in January it's starting anew. 12.1% has been the average for the 12 months of 2004, 6.5% is the "average" of one month, January. If things were as good as before, figure for January should have been as high as the average of the previous year of 12.1%.
By lowering taxes, more people pay, not by raising them. Russia, again, is a prime example. Your advice was the exact advice of the IMF on income taxes, when Russia had Western bracketed income taxes. Hardly anyone paid. They dropped to a flat 13% income tax and the first year tax collection trippled. .
Yes, you gotta point (especially if supported by real life data). I'd have to think about this. But for now what's not clear to me is why a person who didn't pay anything when there was a high tax would suddenly agree too pay a lower tax. Out of a goodness of their heart? That's why to me it's more of a question of enforcing the tax collection.
Taxation is a bell curve effect. At first as the level raises the income rises but at some point, people will start to evade paying or will stop working or switch resources to shadow economics. It's a cost vs reward system. If you consider the cost of getting caught to be smaller then the cost of cheating, then yes, most everyone will eventually cheat. If taxes are low and its easy to fill out forms and it feels "fair" that everyone pays an equal share then people are much more apt to pay then under any other system. Either that or you must spend a huge amount of money (like we do on the IRS) to force continued payment and threaten people with ridiculous penalties. In the US, if you can not pay your bill, be it even $100 (state depending) the IRS can come, take your house, sell it as cheaply and quickly as possible, take their $100 and give you the rest. Of course you're still screwed now.
In unstable economies like Ukraine, there will often be a sever drop in GDP for the first 2-3 months after a new regime takes power, as everyone saves their money in anticipation of what is to come. The difference is that 3-12 months later, the GDP is still low, in other words, people and companies do not feel safe in spending and investing.