Drawing from rich to give poor will increase inflation: Karu

  • 20 Dec 2005 04:24:32 GMT

    Dear Karu

    DO you know economics? Please go and read a good economic book before you talk or get advice from an economist.

    Drawing from rich is called income tax and charging income tax will never increase inflation. Infact it is the best tool for a balanced economy.

  • 20 Dec 2005 06:04:11 GMT

    Dumindak, I don`t know whether Karu has any qualifications in economics but he does own a large footware factory in the Katunayaka FTZ and is definitely a practical economist!

  • 20 Dec 2005 06:43:27 GMT

    DumindaK,

    You sound like a typical JVP `ata-pass` economist!

    While requesting others to study economics, you show your complete negligence of the subject! (Typical JVP!)

    Karu has never told charging tax will increase inflation. Any fool (except super-fools like you and Wimal malli) know a Rs. 195 billion gap cannot be only bridged by taxing the rich and the industry.

    So the only way of bridging this gap is to increase the money supply, which is the reson for the inflation.

    Learn something man! They don`t teach economics at Grade eight!

  • 20 Dec 2005 07:15:10 GMT

    Naleen

    Be cool man, try to discipline yourself first before use the forum, no need to panic and pee in your pant.

    I wrote for the heading, read the heading carefully once more.

    hading is `Drawing from rich to give poor will increase inflation`

    Can you tell me how this will increase the inflation? If you are a man take up the challenge. I am here to answer you.

  • 20 Dec 2005 07:27:51 GMT

    Modayo,

    Excessively taxing the rich will discourage them from further investments and will bring down the production levels. Then the value of money will go down and that is the inflation.

    From who you learn economics? Lalkantha?

    Typical JVP! Typical Grade eight economics!

  • 20 Dec 2005 07:57:09 GMT

    Naleen

    FIrst thing you have to learn is to be respectful when you address a forum member.

    If the money supply is same and the production level remain same will it increase the inflation? (future production is irrelavant here.) No it does not.

    This ia how it will affect the economy

    step 1. You are taking tax from rich, then his demanding capacity become low, there will be excess supply in the market, then prices come down. you find a deflation situation.

    Step 2. Then You give tax income to poor people, his purchasing capacity will go up, demand will go up, excess supply will be consumed. deflation wil decrease and economy comes to the normal level

    Did you understand?

    Try to learn and never try to reply me again.I will not reply to a third grade thug.

  • 20 Dec 2005 08:19:25 GMT

    Modayo,

    You see the rich only as consumers! Big joke. Remember, they are the investors too. You have no brains and what you use is typical Lalkantha logic.

    If you try to tax the investors nobody will invest in Sri Lanka. This is what happened in the 70-77 time and even businessmen like Upali Wijewardena invested in Malaysia.

    You go and ask Inland Revenue Department how much more thay can earn even if they tax at 50% of income!

    How can I call a fool in Sinhalese, if I cannot use the word `modaya`?

  • 20 Dec 2005 09:28:02 GMT

    How? will that be

    Many way most foreign governments manage their economy

    Some of these are: -

    1) Tax (Direct)

    1 A) Branded tax rates

    1.B) CGT

    1.C) CTT

    2) Death duty

    3) Corporation tax

    4) Duty

    and many other ways. Government gets its income form tax. They then spend it. Some are redistributed

    If we were to believe what you say is correct the UK inflation must reach three figures

    But it has never been over 2 %

    UNP continue to talk rubbish

  • 20 Dec 2005 10:01:08 GMT

    Wijesinghe:

    So many govts get their income from tax. True. But these are DEVELOPED countries. Economy does well in those countries and people earn high salaries. So they can afford to pay and govts are able to collect money from taxes...(In Sweden people pay 50% of their salaries as taxes, but they rarely complain, because the remaining 50% is enough to leave a comfortable lifestyle. In Sri Lanka you cannot impose a 50% on a person who earns Rs. 20,000 per month.)

    Do you know we have only 40,000 tax payers in this country, while 50% of the country receive Samurdhi benefits?

    What you do not understand is no matter how hard the govt tries in Sri Lanka the revenue that can be earned by increasing either direct or indirect taxes are limited. Anyway, we have already reached the maximum level in case of direct taxes. If you imply more direct taxes it will seriously affect the industries. So the only option is to increase the indirect taxes to 20% and you will see the outcome...

    So the only way the govt can bridge the budget deficit is to increase the money supply. This is what will happen now...

    Mahinda maama and JVP modayaas have no sense of economy at all, because none of them have ever been involved in the business activities...

    It is not UNP, but the JVP mettas who speak rubbish.

    Please note down the prices of few essential items today(rice, floor, sugar, fish, meat, electricity etc) Check the same in December 20, 2006!

    Then curse Mahinda maama!!

  • 20 Dec 2005 10:10:40 GMT

    Wijesinghe:

    UK is a rich country. Sri Lanka is a poor country. UK has 8 million tax payers. Sri Lanka has only 40,000 tax payers.

    Even if you tax 50% from these 40,000 what you can get is LIMITED. Understand? LIMITED. That is hardly adequate to bridge the budget deficit.

    What are the other options the government has?

    (a) It can increase the indirect tax (which will definitely affect the poor too)

    (b) It can increase the money supply and then increase the inflation.

    Mahinda maama will opt for the second.

    If you want to see, please note down the prices of some essential items today. Then wait another year and compare those with the prices of the same items on Dec 20, 2006.

    You yourself will understand what Mahinda maama have done!

    This is what the JVP modayaas cannot understand. Not surprisingly, because many of them have not even passed Maths at GCE (O/L)

    It is the JVP modayaas who speak rubbish, not the UNP...