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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 368.29+0.6%Nov 7 4:00 PM EST

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To: THE ANT who wrote (98504)3/11/2013 12:20:48 PM
From: elmatador  Read Replies (1) of 217573
 
Two developments:
Developed countries need to tax their people and businesses higher.
Emerging markets need to tax their people and businesses lower taxes.

Why?
For the past 50 years, developed countries were gorging in taxes on their citizen’s consumption.
Citizens were experiencing wealth because there was less taxes on a big pool of consumers
In emerging markets the opposite was happening: The pool of tax payers was too shallow.

Individuals and businesses were highly taxed.
As emerging markets needed to impose a lot of taxes on its businesses and middle classes, they did not consumed as much as developed countries’ citizens

Then demographics hit: As more people retired in the developed countries.
Two things happened at the same time: There was less consumption and a bigger burden to governments.
Government of developed countries did not adjust to that.
They tried to keep the status quo for too long and now need to tax heavier than if they had gradually increased the taxes overtime.

In the merging markets, the opposite was happening.
Almost without being perceived, the average citizen was getting wealthier.
Demographics again.
They had less youngster to take and that meant more disposable income.
They did not start consuming. They still though themselves poorer.
Banks did not lend money to them. Banks did not know they had more money than before.
Then the perception hit. They started consuming. As more people enter the middle class in emerging markets, governments are gorging in taxes.
They now can support the poor people and at the same time they can lower taxation on business.

Those businesses free of the tax burden will become more competitive.
Brazil Slashes Ethanol Tax
247wallst.com


Brazil to scrap federal taxes on food staples to lower inflation
en.mercopress.com

Emerging markets will live henceforth the decades that the developed countries lived post war.
Give credit to no one. It is just demographics playing its part.
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