Monday, 12 January 2009

Are they Dumb?

"The Finnish finance and employment and economy ministries together with the National Consumer Research Centre, a government agency, have launched a project of unprecedented scale to establish whether supermarkets deliver on their promises to pass on the forthcoming food VAT cut to shoppers, Finnish business daily Kauppalehti reported on its website on Sunday."

Are they really serious? a VAT reduction can only be effective if implemented very quickly, the way the UK did. You cannot pre-announce that you are going to reduce the VAT a year in advance. This is total nonsense has resulted in generalized price increase throughout all year long.

Actually even now you are hearing food producer giving the old argument that energy and food raw material are very elevated in order to justify price no one is aware that those commodities simply crashed and were divided by 3 which has not been reflected in prices so far, on the contrary...

On the same line:

"Despite the economic downturn, the average wage-earner's purchasing power will grow sharply this year, says the Taxpayers' Association of Finland."

For whom?

As unemployement rises, some will see their purchasing power decrease maybe by 20%-80%, other will start to see bonus and benefits "collapse" (I like this word).

So I think it's about time for the taxpayer to get out of their office and check the real world, unstick their head out of their formulas, flawed models and generation old computers...

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