Thread: Why are we (Spanish) being pushed down with this new taxation?

I think that what the international banking community is doing to Spain now (and Greece, and then Portugal soon) is what is called the classic "market differentiation". This is always used to define the prices of products that are marketed in large volumes over large areas. This will certainly not be any different if the product is a loan package, the market is the global credit market, and the price is the price of the money (interest). (Just like for example you can't buy the same game for your x-box in the US and the UK unless you buy both a US and a UK x-box, even though the games are the same and the x-box gives the same user functionality.)

Originally Posted by loureed4

Hello,

I´d like to ask something about my country (Spain) , and the crisis we are dealing with.
Yesterday the President announced the decision of going up the I.V.A (Impuesto del Valor Añadido), which is put to any good and service.

We used to have 16%, then 18% and now, from today on, we´ll have 21%. That tax includes everything: If you buy a pack of cigarretes or a computer or a beer, you have to pay now 21% , rather than 16% as we used to.

People are claiming that that would be a total disaster. All the people in the street say that with that taxation or tax, nobody is going to consume and therefore, the country will tear apart.

This measure is enforced from Brussels and specially from Merkel (Germany). They are going to rescue our economy through a loan and they are enforcing certain polcies such as the one I named a moment ago, the increase of the IVA, to 21%.

I am just wondering how if ordinary people, not knowing nothing about Economics, know this, how can it be possible that the great Economist in Europe, in Brussels (headquarter of the EU) don´t know they are going to destroy our economy by enforcing us to lift/go up that basic taxation.

Is it that they don´t know or they don´t care about Spain?

I am really confused why we are to be raised that tax if that eventually will destroy our economy and, if so, who wants to destroy Spain´s economy?

I really don´t get it.

Thanks in advance!

The rate of VAT changes here depending on the economy and the Government. It was reduced when this current economic crisis began, but they couldn't keep it low for long because it reduces the revenue income.

They are all floundering about, trying to balance income with growth. If they reduce taxation, growth reduces and government income with it, plus things like unemployment increase and that increases the drain on government spending.

Good luck. Spain is a country close to my heart and I hope you manage to ride out the firestorm.

Originally Posted by The Great Dane

That same tax is 25% in Denmark. So, no, I don't think that would destroy your economy. Reckless spending while expecting someone else to pay for it (aka socialism) will destroy your economy.

HAHA more neoliberal bullcrap !
Spain had a surplus in budget .

When they first risen the VAT by 3% here the immediate consequence was 15% decline in government revenues.

Originally Posted by loureed4

I am reading right now that UK raised the VAT from 17.5% to 20% in 2010 ...and I wonder what the consequences have been for them.

This seems a key factor to me, if UK succeded doing so, why can´t Spain succeed?

This article points out how the IMF advises Spain to raise the VAT too:

http://elpais.com/elpais/2012/06/15/...94_533737.html

GB is passing also for a lot of troubles. But about that is not spoken.

Originally Posted by The Great Dane

That same tax is 25% in Denmark. So, no, I don't think that would destroy your economy. Reckless spending while expecting someone else to pay for it (aka socialism) will destroy your economy.

And? You cannot compare economies. As I said, when it was raised from 16% to 18% it affected negatively to the economy. Do you think that this new raise from 18 to 21%, and more that things that were in reduced 8% pass to 21% that won't affect? Do you think that people will continue buying that products, except if it is absolutely necessary, and they aren't.

And the nonsense of socialism is to laugh. What is destroying the economy is the neoliberal policies. And do you think that a country with more than a 20% of unemployment(55% of youth unemployment), with most of people with jobs earning less than 1000€ and the same costs of the things as in Germany or Denmark, can afford a new raise of the prices?

It is clear that the commerce will go down. And I hope the waking up of Spanish people and see serious revolts and better said a clear road to the revolution, however it is a dream, because Spanish people have been sleeping for eternity, and there is no possibility that they'll wake up.

This is simply great:

Viv -> "Raise of the VAT is good, more income for UK, we coudn´t keep the VAT low" . Viv, thanks for your wish that our Economy improves, there are a lot of families struggling here. Thanks!

mutmekep -> " They raised 3% of VAT and as a result, they obtained 15% less in revenue"

Killgran, I quote from you: "...As I said, when it was raised from 16% to 18% it affected negatively to the economy. Do you think that this new raise from 18 to 21%, and more that things that were in reduced 8% pass to 21% that won't affect? ..." . Kilgram, that so simple fact, don´t Economists know about it?

Conclusion: IT IS IMPOSSIBLE TO AGREE ON WHETHER OR NOT THE RISE OF THE VAT IS GOOD OR BAD FOR THE ECONOMY, JUST IMPOSSIBLE, GREAT!! ....Is there no reliable data on this issue, as the one said by Mutmekep, with numbers (3% of rise= 15 less in revenue)? . Why then IMF advices a rise of the VAT to Spain?

Great Dane: I know that Denmark and Sweden has 25% of VAT, but those two countries can afford it, they have stability ; it is, in my opinion, a totally different situation, not applicable to the countries struggling.

This is my view (totally in disagrement with the IMF and I guess there are a bunch of Economics intelectuals in the IMF to suggest the a rise of the VAT is advisable for Spain):

Drop in the VAT -> more consumption -> more profits for the shops, businesses, companies -> these companies will hire more people -> these new people hired will consume -> more consumption -> more profits for the small and medium-sided companies -> let´s hire more people and open new branches -> the new hired will say: let´s consume a litte ....

Rise in the VAT -> more direct revenue for the government but less consumption -> small businesses closes -> these new unemployed people unable to consume -> more small business closes -> more unemployed people unable to buy in the shops.

I simply don´t get why the IMF is advising Spain a raise in the VAT.

Originally Posted by loureed4

This is my view (totally in disagrement with the IMF and I guess there are a bunch of Economics intelectuals in the IMF to suggest the a rise of the VAT is advisable for Spain):

Drop in the VAT -> more consumption -> more profits for the shops, businesses, companies -> these companies will hire more people -> these new people hired will consume -> more consumption -> more profits for the small and medium-sided companies -> let´s hire more people and open new branches -> the new hired will say: let´s consume a litte ....

Rise in the VAT -> more direct revenue for the government but less consumption -> small businesses closes -> these new unemployed people unable to consume -> more small business closes -> more unemployed people unable to buy in the shops.

I simply don´t get why the IMF is advising Spain a raise in the VAT.

IMF is not advising Spain with the usual term of advise , they are trying to get them bust .
IMF predicted that Greece's economy will shrink by 10% in the last 3 years they run the show , economy shrunk by 22% , now the government is planning to sell the public electricity company for few hundred millions, the company owns coal reserves worth of over €300billions.
Bringing Spain down to their knees will make everything cheap for the sharks to grab .

Originally Posted by mutmekep

IMF is not advising Spain with the usual term of advise , they are trying to get them bust .
IMF predicted that Greece's economy will shrink by 10% in the last 3 years they run the show , economy shrunk by 22% , now the government is planning to sell the public electricity company for few hundred millions, the company owns coal reserves worth of over €300billions.
Bringing Spain down to their knees will make everything cheap for the sharks to grab .

Do you really think so?

IMF wants us to bust, what for? to make verything cheap?

I just can´t believe that. Ruin a country, killing people?. Who, why?

Who run the show?. Who are the sharks?. I read somewhere Spain´s ruin would affect other countries in the Eurozone and hence, it is not good for anybody.

Besides, you know this and no other Economist in Spain in the gabinet of Mariano Rajoy knows it?.

Originally Posted by loureed4

Do you really think so?

IMF wants us to bust, what for? to make verything cheap?

I just can´t believe that. Ruin a country, killing people?. Who, why?

Who run the show?. Who are the sharks?. I read somewhere Spain´s ruin would affect other countries in the Eurozone and hence, it is not good for anybody.

Besides, you know this and no other Economist in Spain in the gabinet of Mariano Rajoy knows it?.

Don't listen to me just go and read what happen ANYWHERE IMF got invoved .
Countries and people are the least of plutocracy's concern , take for example how Spain was forced to save Bankia , would ever Bankia lift a finger to save Spain ?
Global speculators , plutocracy and banksters are the sharks , now you have this (*)(*)(*)(*) Juncker telling you what to do when each Luxemburgian is €3.4m in debt yes this is their per capita debt! now you have convicted for paedophilia Baroso dictating his terms.
Of course they know it but they are doing what they are told to do, if you believe that the governments have a say in developments you are dead wrong , looks like you forgot where Monti , Papademos and Draghi belong .

Originally Posted by mutmekep

Don't listen to me just go and read what happen ANYWHERE IMF got invoved .
Countries and people are the least of plutocracy's concern , take for example how Spain was forced to save Bankia , would ever Bankia lift a finger to save Spain ?
Global speculators , plutocracy and banksters are the sharks , now you have this (*)(*)(*)(*) Juncker telling you what to do when each Luxemburgian is €3.4m in debt yes this is their per capita debt! now you have convicted for paedophilia Baroso dictating his terms.
Of course they know it but they are doing what they are told to do, if you believe that the governments have a say in developments you are dead wrong , looks like you forgot where Monti , Papademos and Draghi belong .

Thanks for the reply,

In short: IMF is controlled by the bankers, and they are forcing to fall down to Spain, Portugal, Greece...which countries exactly? I mean: Do they need to make fall down another one, do they need more countries? How many of them?

So, Spain falling, Global Speculators and Banks win, so with Portugal and Greece?

And UE, Merkel, Hollande, Cameron, and so forth they just don´t care either about Spain and Portugal tearing apart?

VERY INTERESTING YOUR POST.