President Laura Chinchilla’s push for more taxes stems from her belief that government has to be the nanny. In her independence day speech she said that Costa Rica’s level of taxes is below its level of development.
The idea that is current in liberal circles is that developed countries should have high taxes. Sweden, for example, takes 47.9 percent of its gross domestic product in taxes. Denmark takes 49 percent. Both numbers come from annual indexes compiled by the Heritage Foundation.
Costa Rica is listed as taking 15.6 percent of the domestic product. Ms. Chinchilla would like to take 20 percent.
Juan Carlos Mendoza Garcia, president of the Asamblea Legislativa, also is a member of Acción Ciudadana, He is fond of saying that a tax plan should take from those who have for those who do not.
Ms. Chinchilla’s administration appears to have reached an accord with the opposition parties that control the legislature to push through revised tax legislation. Presumably Carlos Ricardo Benavides, the minister of the Presidencia, had a large role in this agreement. He’s the guy who created the new tourist tax for the benefit of the Instituto Costarricense de Turismo. We can see the impact of that.
None of these individuals appreciates the fact that you get less of whatever it is that you tax.
Two of the most robust economies in the world defy Ms. Chinchilla’s point of view. Hong Kong takes 13 percent of its
gross domestic product. Singapore takes 14.2 percent. Both figures are again from the Heritage index. Meanwhile, Danish professionals are on record for not wanting to work in their own country due to the high taxation.
Costa Rica’s problem is not the level of taxation. It is the sprawling, inefficient bureaucracy that seems to be designed to provide jobs for the politically favored instead of doing anything for the country. Ms. Chinchilla has done little to reduce the expenses of the central government.
What is needed is a complete overhaul of how Costa Rica is run. There are far too many government employees communicating on Facebook and Twitter all day and not doing any thing. We would ask minsters to take a look at the computer server reports from machines under their jurisdictions. These tell the tale.
The Caja Costarricense de Seguro Social is shaking up its employees after officials read in La Nación that the number of staffers calling in sick rose dramatically during major soccer games. Then there were the teachers who got two days off to attend a professional union convention, but few showed up.
We strongly object to Ms. Chinchilla’s idea that the role of government is to use its redistributive function to insure the welfare and security of citizens in the future. The role of government is to get out of the way as much as possible to let the economy function. Mr. Mendoza wants to take from those who are working and earning money and give it to those who are not. Class warfare may be good for votes, but it is not good for the economy.