Panama has 7 CEOs in their cabinet

Mr. Loverman

https://www.youtube.com/watch?v=GqNe6bEpmss

South America is booming. As an example, Panama believes low taxes encourage spending and growth (their economy proves this is true), and they have 7 CEOs in their cabinet.

Personally I know I would be more willing to spend a lot more money (rather than continue to furiously save) if my tax was 15%.

Our Government could learn a lot from South America instead of charging into their current strategy of raising taxes and taking billions out of the economy.

pablo_escobar

taxes were reduced for corporations but increased for little people of panama but that's hardly surprising...sure, low taxes for corporations great, just increase for middle class and poor.

i'm all for low taxes when applied to all citizens but this rarely works in practice.
someone has to pay for running country and so it's usually middle class and poor.

Unless you make efforts to educate the population (in particular, the 40% living in poverty) , crime will simply increase, inevitably swallowing the country.

their currency is pegged to the US dollar so you could consider them a colony of the US empire..

Ponster

Mr. Loverman wrote: »

and they have 7 CEOs in their cabinet.

I'm fairly sure that to tempt CEOs like that to help run the country they're gonna need a pretty hefty wage packet and I don't know if the country would accept that right now.

Brussels Sprout

You know the way that people make unflattering jokes about Ireland being a banana republic? Well I'm pretty sure that Panama is actually a banana republic and probably not the sort of country we should be aspiring to be like.

Mr. Loverman

Not sure the reasons for all the negativity.

The personal tax rate is 15%, the corporate tax rate is 25%, and the VAT rate is 7%. They have been lowering personal taxes rather than increasing them, so I'm not sure how that is screwing their middle and upper classes.

The country has had massive growth over the past few years and while I agree they have too many people living below the poverty line (25% not 40%) the point I was making is you can grow your economy by lowering tax and not taking money out of the economy.

pablo_escobar

Mr. Loverman wrote: »

Not sure the reasons for all the negativity.

The personal tax rate is 15%, the corporate tax rate is 25%, and the VAT rate is 7%. They have been lowering personal taxes rather than increasing them, so I'm not sure how that is screwing their middle and upper classes.

The country has had massive growth over the past few years and while I agree they have too many people living below the poverty line (25% not 40%) the point I was making is you can grow your economy by lowering tax and not taking money out of the economy.

where did you read it was 25% living in poverty?
also, VAT was raised from 5% to 7% and extended to many products and services..

transportation of passengers and cargo from non-US countries will be taxable.

these additional taxes will simply be passed on to the panamanian population.

southsiderosie

Panama benefits from 1) being a regional banking center, 2) having currency stability from being pegged to the dollar, and 3) being a major transport point for goods coming from Asia to the East Coast, and from South America to Asia. Arguably Ireland fits the currency model, but it is not going to be a banking hub anytime soon, and it is not well positioned to be a cargo hub (although it could be an air transport hub if the DAA were not so incompetent).

I also think their governments deserve credit for helping stabilize the country over the last 15 years, especially considering how devastated they were after the US Noriega invasion debacle. I first went down there in 2003, a few years after the canal zone had officially been handed over, and the energy was palpable. They are doing even better today. Poverty is still a serious problem, but it has come down over the last 8-10 years. Overall, they have been making pretty steady progress; I'm not getting all of the negativity in this thread either.

That said, I am not convinced by the "CEOs in government make everything better" mantra. Bush was hailed as our first "CEO" president, and look how that turned out. :mad: In addition, that Fox News report was shamefully biased; the US could have lower overall income taxes if the state were allowed to own the country's largest industry, and use the revenue to support government spending. But that would be - gasp! - socialism...!!! (cue scary music)

Pablo, cargo is taxable because the taxes from goods passing through the Canal accounts for a large chunk of government revenue. And consumer goods are relatively cheap because there is so much trade through the canal; it's like the Hong Kong of the region.

opinion guy

I've been to Panama. There is incredible poverty there. Yes there is growth but its far from equitably distributed. Not something we want to copy really is it?

Mr. Loverman

I'd rather have nothing than 300k debt.

southsiderosie

opinion guy wrote: »

I've been to Panama. There is incredible poverty there. Yes there is growth but its far from equitably distributed. Not something we want to copy really is it?

There is incredible poverty, but Panama is a middle-income country. There are also high levels of income inequality, but Panama's is not extraordinary for the region; inequality in Latin America is the highest in the world. Countries don't turn into Sweden overnight.

I think Panama's growth is a positive turn of events, but they basically adopted sensible macroeconomic policies and government debt is being used to invest in infrastructure, so it is not a miracle. There is nothing stopping Ireland from doing anything similar.

Again, I don't know why people are being so negative in the thread.

pablo_escobar

southsiderosie wrote:

Pablo, cargo is taxable because the taxes from goods passing through the Canal accounts for a large chunk of government revenue. And consumer goods are relatively cheap because there is so much trade through the canal; it's like the Hong Kong of the region.

i agree with you, just saying that the US are exempt from those taxes which offers an unfair competitive advantage over other countries that want to use panama as a trading center.

it's basically under control of the US.

SkepticOne

OP, the problem with this suggestion is that if it were to have been taken up five years ago in Ireland, the CEOs would have been the heads of construction companies, property developers, bankers like Seany Fitz et al., the very people that already had too much influence in the country in the years leading up to the collapse.

Panama sounds good now but should they experience a downturn these same CEOs will be viewed in a negative light as crony capitalism.

It is important to remember that before the collapse here, Ireland too was held up as an example to other countries as to how the economy should be run. One of the things trotted out by politicians was that social partnership was one of the key factors in Ireland's perceived success. Now that things are going the other way, this same social partnership is seen as part of the problem.