Re: two currencies and Korean war

[Alan Cibils <abcibils@xxxxxxxxx>]

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