Tuesday, March 30, 2010

Why I hate tax

In Indonesia, the tax payment deadline is coming, many people are reluctant to pay since the Gayus gate... While the who-call-themselves-a-nationalist or the Mulyani's supporters still insisted to pay. I still pay... but I admit that I hate to pay.

Today tax is very different from the Roman or the Caliphate era tax. Indonesia is using the fiat money, which means that Indonesian government can issue the money in any amount they like. As the result is, the condition that make Indonesian government lack of money is less likely to happens. This condition however, create inflation, which make currency values decrease. If it doesn't dealt quickly will result in economic depression or even a bust.

Beside the issuing money, Inflation comes from :
1. increased in the welfare of the people, the more fluid the money the higher inflation (that answer my highschool question, why when our income increased, the tax will also :( )
2. Corruption, more money comes from unlegitimate source will add the money in the public, that create even worse inflation
3. Forgery, unregistered money will also creates inflation

There are two ways of overcoming inflation, which are :
1. fiscal policy (tax, issuing obligation)
2. monetary policy (interest rate)

Indonesian government see the only way to fight inflation is by increasing tax subjects <= this is totally gay dude... the problem is in the government, the corruption, government's fault... and still the people who work hard must compensate the problem... I wonder, why not use obligation instead? we get the money, and inflation handled?

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