Given all of the hand wringing, woe is me and sorrowful words that an economic apocalypse was right around the corner, the 2012 Fiscal Plan always had a Plan B. It is just that this “faster than the speeding bullet” government of ours did not know it; until now.
Or the government did know it but did not wish to make any kind of admission that would have resulted in an electoral backlash and not just a legal rejection from Sala IV (Supreme Court) of the Fiscal Plan itself.
We were scared! After all nobody wants to have an apocalypse, even a mini apocalypse as would be the case in Costa Rica.
Borrowing big time billions of dollars was not Plan B. The government would have had to borrow that money even with the proposed Fiscal Plan in place because (a) tax collections were delinquent, (b) outstanding bills had to be paid, (c) the massive payroll had to come current as well as (d) we owe a bucket full of money to foreign lenders and that had to be brought up to date.
With or without the Chinchilla’s Fiscal Plan…massive borrowing was inevitable.
What the 400+ institutions learned is that instead of relying on Mother Paradise to save their bureaucratic, incompetent, nepotistic butts was to raise their rates which in turn raise taxes. Everyone wins but the consumer.
The Administration adores this wisdom and even calls it “innovative”.
Examples are, ICE raised its rates and wants raise them again. With the incremental upswing in price, comes a larger amount of taxes. 10% of 100 = $10 in tax revenue, but 10% of 130 = $13 in tax revenue. Multiply that out by perhaps 1.3 million households and that comes out to an added $1.6 million per month going directly to government coffers.
If the ICE plan works, “Let’s arbitrarily increase the value of automobiles both when imported and those that ride on the Roads of Disrepair (Marchamo). If we (Government – INS) get caught, we back track, do a mia culpa, and offer refunds which will take years to process.” And, it is working! Money is pouring in with grumbles and “Malditos” and more wringing of hands but not in sorrow but rather the joy of greed.
“If that puts out some of our fiscal fires, let’s try a few more ideas.”
Whoever said homes are to be valued X amount per square meter? Goodness, Costa Rica is the Happiest Country in the World and happiness is never free.
So, the government and its infinite wisdom have raised the value of real estate by 20% up to 40% for newer construction although very little is selling. A jolt to the middle class and what’s left of it whose homes are now in the “luxury” tax level. Not the upper middle class, but the middle class whose property taxes just now jumped up disproportionately.
A thought: “Let’s kill the middle class which does very little except go to their jobs each day, sometimes vote and only purchases goods and services when required. Save the rich and damn the poor. Somebody has to pay!”
Even the monopoly concession RTV whose job it is to examine vehicles to meet basic road conditions is requesting a better than 150% rise in consumer charges: more taxes, not so bad.
However, some governmental organizations had a hissy fit over this because they were not included in the “take” and the RTV hyper raise is on “hold”, but still looming.
As Sherlock Holmes would say, “Plan B is really elementary.”
“To hell with a national Fiscal Plan that is sure to be scorched by our supreme court (Sala IV). Let’s just quietly raise institutional prices and rates which will quickly translate to private enterprise price increases and ergo more taxes because 10% of 20,000 is much better than 10% on $10,000.
And, the best part is that we can borrow what money we now need and demonstrate to lenders (Bond Holders) increased taxes will be available to pay off the debt.
The list goes on from telephone, electricity, cable companies, water to the importation of goods whose cost will be passed down on to…you and me.
For three months in a row, I had to pay the CAJA, Seguro Social an incremental premium increase, all published in fine print. Like venereal disease, this is another gift that keeps on giving.
How did the government come with a 4.5% inflation 2012 rate? Maybe that’s every six months.