Monday, January 18, 2010

How The 4.3% Growth Forecasted For 2010 Gonna Feel Like

A lot like the 4.5 years that have just gone by. That's because the average growth rate from July 2005 to December 2009 is ... 4.3%. And 4.3% combined with a flat tax of 15% is way too low for the government to keep the welfare state that has seen us through thick and thin. That's because 4.3% and 15% brings less money to the government coffers than a 5.5% growth and a marginal tax rate of 25%. Better collection may and have brought in more money but they will not do that in a recurrent manner.

So that's bad news because the service level of government is going to go down and if you thought you'd seen some rather hectic voodoo accounting, well, you ain't seen nothing yet. At least till we go to elect a new Minister of Finance.

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