Economist on the inevitability of tax increases.
"The accumulation of public debt (the inevitable consequence of budget deficits, its twin sister) always leads to tax increases. So taxes will have to be raised again soon, of course. After the elections, of course," warns economist Guntars Vitols.
"And there’s no need to talk about some investments that somehow pay off and increase state revenues. The state budget is the foundation of the redistribution mechanism - it collects taxes and then redistributes from one pocket to another. There are also some small expenditures in the budget to stimulate the economy, but these are figures after the decimal point.
If taxes are insufficient, if the budget cannot be balanced, then borrowing is necessary, and your debt grows, along with the corresponding interest expenses, and then taxes must be raised just to pay them.
Our heroic leaders have quickly raised interest payments over the past 10 years. It was about 200 million (annual debt servicing payment - ed.), now it’s about 600, in a few years we will approach a billion, and then in terms of annual debt payments, we will reach the total amount spent on education. In percentage terms. In gratitude, the people are generous - over these years, salaries, bonuses, and political ratings of those implementing such policies have risen even faster than the debt.
How else could it be! The 'disappearance' of money in the black hole is realized under very resonant names. For example, 2021 was the 'recovery budget,' 2022 was the budget for 'families and security,' then it was about 'security and people,' now it’s simply about 'insecurity.' At least, we are fine with security.
Security from debt collectors, probably, because the increase in the defense budget is just a small part of the money spent in these years. But a wire fence has been built.
Proposal. To make it easier for voters, the education system should be completely shut down. There are two benefits to this. First - the fool suffers less because he understands nothing. Second - there will be more money for interest payments and taxes will be raised more slowly," writes G. Vitols with sad irony.
