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Russia Archive

Saturday

4

September 2010

0

COMMENTS

Smoke for the Motherland

Written by , Posted in Health Care, Welfare & Entitlements, Taxes

Excise taxes, where government taxes the sale of particular goods, are usually levied with the excuse that consumption of a good or engagement in a certain activity is harmful for individuals. If this were actually true, you’d expect government bureaucrats to be happy when activities hit by excise taxes decreased – not that government has any business trying to discourage such activities. But as this story from Russia shows, they just want the money.

Russia’s finance minister Alexei Kudrin urged citizens Wednesday to smoke and drink more to help lift tax revenues for spending on social services.

“If you smoke a pack of cigarettes, that means you are giving more to help solve social problems such as boosting demographics, developing other social services and upholding birth rates,” Kudrin said, quoted by the Interfax news agency.

“People should understand: Those who drink, those who smoke are doing more to help the state,” he said.

As I recall, it didn’t turn out too well the last time Russia asked its citizens to prioritize the collective good above their own choices and freedoms.

Monday

21

June 2010

0

COMMENTS

Russia Eliminating Capital Gains Tax

Written by , Posted in Taxes

Formerly communist Russia is beating supposedly capitalist America at our own game.  In order to attract new investments, Russia will eliminate their capital gains tax in 2011.

Russia will scrap capital gains tax on long-term direct investment from 2011, President Dmitry Medvedev has said.

Mr Medvedev said that in terms of improving Russia’s investment climate “we, I hope, are moving forward”.

…Its oil revenues fund, which has been financing the deficit, is expected to end next year, and the government wants to attract more foreign investment to boost the economy.

In recognizing that the correct capital gains rate is zero, Russian politicians seem to understand tax policy better than our own. Meanwhile, the U.S. capital gains rate will increase from 15 to 20 percent in 2011 if Congress does not extend the cuts enacted under Bush.  The recently passed government run healthcare bill also included a 3.8% rate increase that will take effect in 2013.

Maybe the Russians will just be capturing the investments that Americans don’t want.