At some point in the future, you might find yourself ruling a country where you are able to take more than 50% of the top of the salaries of all nationals. What to do with all those funds burning a hole in your pocket? Obviously, you first make sure that your budget has a deficit. You’ll soon realize that your nationals still have some disposable income left, which is sacrilege. Additionally, the utility company you sold to your neighboring country has really got you in a pinch, so you might as well pay them off. Here is how is an easy three-step plan to grab some more cash, inconspicuously.
- Lower the VAT rate on electricity. Your nationals will go bonkers and sing your praise for quite a while.
- At the same time, let the energy company raise their prices. No one will notice and if they do, just blame the market prices.
- Recuperate your tax income loss by raising the VAT rate again and present it in a policy with a catchy name, like Tax Shift, that promises a net lowering of taxes. Don’t forget to set an elevated threshold, so most people can’t benefit from the lower taxes.
Topic for next class: raise the age of retirement. You’ll be able to collect taxes for additional years, and get this … you’ll save on pension payments. That’s a double whammy 🙂