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Thanks for the correction and I agree that your
statement does seem to hold for the Argentine Case, given the facts that I do
know.
Sean
----- Original Message -----
Sent: Tuesday, January 15, 2002 12:15
PM
Subject: Re: two currencies and Korean
war
At 1/15/2002, Sean Reilly wrote:
I surmise
that you are referencing the current situation in Argentina.
Argentina's economy is highly informal, which means that the around 40% of
the people who should be paying taxes, do not. These persons who you
are referring to, who are excluded from the "formal economy", are the very
persons who also do not pay their taxes. So, they are excluded,
because they choose not to participate in the "formal economy".
Sean,
One further correction. You are correct that
approximately 40% of the economy is "informal". You are incorrect, however, to
assume that they don't pay taxes. The single largest portion of the Argentine
state's revenue is the sales tax (currently at 21%), which affects _all_
consumers, formally and informally employed, and unemployed. This is a highly
regressive and perverse situation, especially since there is no tax on capital
gains or earned interest income. My statement about the state being parasitic
and living off the poorest while guaranteeing that the wealthy and the
corporations make a killing holds in the Argentine case.
Alan
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