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WSJ: ‘Experts’ Advise Poor Countries to Become Rich by Raising Taxes

Wall Street Journal, Tax ‘Experts’ Target Costa Rica, by Mary Anastasia O’Grady:

Latin America is littered with once-promising nations brought low by self-indulgence. But Costa Rica, the so-called Switzerland of Central America, was supposed to be above it all. While the rest of the isthmus was immersed in guerrilla wars in the 1980s, Costa Rica enjoyed peace. That stability and the country’s better-educated population put it well ahead of its neighbors in the post rebel-war period.

Now the education and health gap that once existed between Costa Rica and the rest of the region is disappearing. … Since January, the government of President Laura Chinchilla of the National Liberation Party (PLN) has been pushing a package of sharp tax increases to fund a spike in government spending.

The Inter-American Development Bank seems to approve. A statement released from its country representative on Friday said that the bank “does not advocate a specific tax burden or tax policy.” But IDB tax expert Alberto Barreix has twice visited the country this year to endorse the Chinchilla plan, calling it “a heck of a tax reform.” He has also said that Costa Rica needs a tax burden similar to Argentina’s.

Some Costa Ricans know better: A coalition of antitax activists has launched a public information counteroffensive to inform citizens of the cost of the tax hike. A video called “Costa Risa,” literally “Laugh Coast,” that mocks the political class has gone viral on the Internet.

Whether the tropical tea party can prevail is far from clear, but its struggle ought not to be ignored, because it is a microcosm of a threat to the entire region. Geniuses from Washington’s multilateral community have decided that poor countries cannot become rich countries unless their governments impose heavy tax burdens on the locals, and these “bankers” are using rich-country resources to make it happen.


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