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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Lucretius who started this subject5/12/2002 8:51:57 PM
From: S. maltophilia   of 436258
 
online.wsj.com
5/13 WSJ; Heard in Asia column:
South Korea Pays Heavy Price
For Recent Credit-Card Boom

...Late in 1999, the government came up with a plan to resolve two problems. Suspecting that taxes were being underreported, it needed a way to make sure transactions were being accounted for properly -- and therefore showing up on tax forms. It also wanted to get people spending more to lessen the economy's reliance on exports.

Credit cards were the answer. For every 100 won (eight cents) consumers spent above an amount equal to 10% of their income, the government would allow a 20-won tax deduction.

Banks and other companies were more than willing to help. Corporate lending was languishing, and credit cards would do nicely as a profitable replacement.

The result was a massive credit-card giveaway. Consumers were offered free toasters or mobile phones or had their names placed in a lottery, just for agreeing to take a card. Some companies sent card recruiters onto the streets. The measures were an astounding success. On the tax front, the increased use of credit-card transactions worked just the way the government had hoped. It exceeded by 3% its target for tax receipts last year, for example....
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