and an over all tax rise of 20%.
Only if that was as significant as you meant it to be. Before you take out an economics book and begin your lecture, Mr. prof, consider the specificity of the Ukrainian economy- as much as half of all business do not pay taxes. One of the achievements by the Orange has been the reduction of this "shadow economy" vis-a-vis fighting corruption. (actually I wonder if anyone has been making a case, linking this with the reduced GDP growth.) Sure, I agree taxes should be low, but one step at a time- make everyone pay, then you can afford to reduce taxes.
Another lie. I'm sorry I didn't realize Yanukovich was running the country for any portion of this year. According to the IMF, as I proved last time, Ukraine's inflation was 14% by the end of Sept, plus the .8 for October and the 1.4% for November, that makes 16.2%, reasonable to say that along with December it will be around 17%.
Another thing that I might have asked for your input some time ago- how was it possible that in December 2004 GDP growth was 12.1% and a month later, Jan. 2005, growth was 6.5%?
Gee, because in December that growth rate was for all of 2004, on January 1 the count starts a new. 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. Rather easy to understand.
Before you take out an economics book and begin your lecture, Mr. prof, consider the specificity of the Ukrainian economy- as much as half of all business do not pay taxes. One of the achievements by the Orange has been the reduction of this "shadow economy" vis-a-vis fighting corruption.
Interesting, the Russians did the same thing while dropping the tax rate on corporations from 36% to 25% and 14% for tech companies. The tax rate as counted and compliance with the tax rate are not related as stated. They are related in how willing people are to try to go around the tax rate. The higher the tax rate the harder it is to make people pay or to keep them working if payment is enforced. Welcome to macro economics.
Just because they eliminated any of the shadow economy, which I find hard to believe in commodities since artificial price caps always breed shortages and a shadow economy, the bane of the old Soviets, does not mean that the tax rate will increase.
Sure, I agree taxes should be low, but one step at a time- make everyone pay, then you can afford to reduce taxes.
A typical socialist mentality. 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. Don't believe me? Go look it up, its one of the main arguments for driving flat taxes in America.