Hungary passes 2010 tax law, key test for govt.
Hungary has seem to figure it out that it takes tax cuts and budget cuts to gain financial stability. We should be doing what they are doing. We need to stop the unprecedented spending and cut cut cut spending! Look at California who has to issue IOU's for tax refunds. We are going down the wrong path but it is good to see that there is at least one nation in the world who is realizing that it takes budget cuts and tax cuts to gain financial stability.
Tuesday, June 30, 2009
TAX CUTS: IN HUNGARY
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1 comments:
From what I understand, the tax cuts spoken of in the article are cuts on income taxes, followed by an increase in sales tax on certain items, namely real estate and luxury items. So there's really not a tax cut, rather a tax shift....a shift to the wealthy. Sort of like spreading the wealth...tax the rich to feed the poor. That's pretty much what Hungary is doing.
Tax cuts, in any nation, are always accompanied by tax increases somewhere else in the budget.
By the way, Hungary doesn't have much choice in their financial dealings right now anyway. Since coming under the all-powerful wing of the IMF, they sort of have to do what they're told. If the IMF were to issue the USA a loan then our government would be forced to do what you say, Nate...cut taxes....or we could just elect a Republican. Doing so would save on all the paper work naturally incurred when applying for a loan.
Hungary's biggest problem is their pension system (sort of like our social security payments, but much more significant in volume). It's bloated, corrupted, and based on the old-time communist reward system, which means it's completely inconsistent with financial growth and stability. Unfortunately during the economic system switch-over in the early 90's, the old pension system remained.
So why don't they get rid of it? Well, it's easier said than done. For some it means life or death. My mother-in-law is one of those. If she didn't get her pension money every month, she wouldn't be able to live. The pension system is that fundamental to survival. So what does a county do in a situation like this, when half it's citizens are dependent like that?
They can't just cancel it. I suppose they should slowly phase it out over the next generation. Whatever they do, something needs to change.
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