( Strategy Journal Published February 29, 2008 )
long ago is generating an explicit and media pressure, if not in the same halls of the palace of La Moneda, aimed at eliminating or significantly lower tax fuels. In this regard, the ideological alignments work like a champ. When trick-or tax cuts, business behaves with impressive discipline, since they want the taxes that exist are only privates, that is, those taps on people's income-extraordinary profits- that directly benefit from your project build wealth. The other, public, aimed at strengthening the education and health and ultimately democracy of free men, should disappear as a society of this nature undermines the dominance and control of the elite.
Given the power of the economic elite, to eventually succeed in eliminating the tax on fuel, always arguing for the poor. To the extent that it exacerbates the problem of oil, costs, inflation and loss of income of Chileans, will end up deleting it. And while the fall in oil prices, thanks to the elimination of fuel tax, will benefit more to the higher income sectors, it does not mean that it will not benefit the poorest, but obviously to a lesser extent.
Bear in mind that this tax is a disincentive car, whose use is largely responsible for the higher income sectors, and consequently, lower the tax benefit to those who today use plenty of the car and end with the only green tax that exist in Chile, the only environmental tax that penalizes the use of highly polluting products. The poorest
certainly hardly see the effect of this reduction as the monopolistic nature of markets reductions will make fuel prices go running on the road as an increase in the profits of producers and distributors. If you want to benefit the poorest sectors is not correct to eliminate this tax, but would be more useful to have special pricing policies and subsidies for goods such as rice, noodles, milk, bread, which are the most abused lower-income sectors. Marcel
claude, Economist.
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