Korn Attacks Thai Governments Pro-Rich Approach: Budget Debate

[webfact]

BUDGET DEBATE

Korn attacks Govt's pro-rich approach

The Nation

Korn Chatikavanij at the budget debate

BANGKOK: -- Former finance minister and Democrat MP Korn Chatikavanij attacked the government for excessive borrowing and corporate tax cut, which will benefit the rich but pass extra debt burden to the poor.

In the first day of parliamentary deliberation on the 2013 budget bill, Korn said that the Bt2.4 trillion expenditure is the record high. Meanwhile, as revenue target is set at Bt2.1 trillion, the government will need to borrow Bt300 billion.

Amid the deficit, the government this year slashes the corporate tax rate from 30 per cent to 23 per cent, which will benefit the business sector but will cost the government about Bt150 billion in tax revenue. Korn sees the possibility that the government would launch unfair tax approaches, to cope with the revenue loss.

He also expressed concerns over off-balance budget, which included the Bt350 billion borrowing to finance water management projects, which remain vague.

"The government has over-extended its power. The government is asked to review this approach and regain the sense to assist the general public, so that they can stand on their own feet. For failed projects, ministers responsible for the projects need not to resign but they should have the projects (including the rice-pledging scheme) reviewed," he said.

-- The Nation 2012-08-15

[Felt 35]

Voted in by the poor working for the rich, true Thai democracy!

[Bluespunk]

Any news on yingluck's canal tour, is she keeping in touch with debate via twitter?

[Soupdragon]

Is there any doubt that public funds are not being used to benefit the public but instead to create an environment that may be beneficial for a certain absentee and facilitate his return ?

[ratcatcher]

Voted in by the poor working for the rich, true Thai democracy!

This image comes to mind with this government.

[geriatrickid]

Wow. Korn criticized the corporate tax adjustment????? This comes from the man that had previously said it was too high?

The corporate tax rate was not "slashed: from 30 per cent to 23 per cent. It is the implementation of the offsets to the increase in other indirect costs such as the minimum wage.

The reduction is intended to keep Thailand competitive in the ASEAN community. It is not an unreasonable rate, and I would expect those that bash the government as being "leftists" to be applauding the decision.

Look at Thailand's neighbours that are viable alternatives for corporate investments;:

Malaysia 25% with consideration of going to 22%

Vietnam 25% with consideration of reducing the tax rate

China 25%

As for the PTP's borrowing, Mr. Korn is a hypocrite. As I read the borrowing numbers, the PTP administration has borrowed less than the precious Democrat administration. I am against government borrowing and deficits, but Mr. Korn was the man that borrowed for all of his fanciful spending. The reality is that the cost of debt service is so low, than Thailand can afford its debt load. Unfortunately for my investment portfolio, interest rates for borrowers, especially sovereign debt, are still rock bottom low, so there is an incentive to borrow. Banks and Investment Houses are practically giving the money away because they are sitting on trillions of euros/$$$ and they don't want to lend in the EU or the USA.

If anything the Thai rate was too high and an impediment to corporate investment and job creation.

[jonclark]

Totally get what your saying GK and completely agree with your points.

But if as you stated the Dems borrowed vast sums (the majority of which probably need repaying, unless they repaid it all during the term of their administration) and now PTP are borrowing equally large sums give or take a few billions, if you put the borrowing of the Dems and PTP over the last few years togetherl that adds up to a lot of national debt.

Surely given the debts inherited by PTP from the Dems they should be borrowing less and would aim to be more fiscally watertight and accountable. If you have large debts is making them larger by borrowing more good economics?

[rubl]

With Small and Medium Enterprises accounting for 72% (or was it 76%) of total employment, I still have to see figures on how much they accounted for paid corporate taxes and how much for low wage personel.

Till those figures are available I tend to believe that larger companies profit from the Corporate Tax cut with limited offset in higher wages. Anybody out there with details?

[whybother]

Wow. Korn criticized the corporate tax adjustment????? This comes from the man that had previously said it was too high?

The corporate tax rate was not "slashed: from 30 per cent to 23 per cent. It is the implementation of the offsets to the increase in other indirect costs such as the minimum wage.

<snip>

"such as the minimum wage." ... Which they haven't fully implemented.

[yougivemebaby]

Bahahhaha I thought they meant Korn the band. It's the only reason I read this post. Way to throw me off dude!

[lungmi]

Wow. Korn criticized the corporate tax adjustment????? This comes from the man that had previously said it was too high?

The corporate tax rate was not "slashed: from 30 per cent to 23 per cent. It is the implementation of the offsets to the increase in other indirect costs such as the minimum wage.

The reduction is intended to keep Thailand competitive in the ASEAN community. It is not an unreasonable rate, and I would expect those that bash the government as being "leftists" to be applauding the decision.

Look at Thailand's neighbours that are viable alternatives for corporate investments;:

Malaysia 25% with consideration of going to 22%

Vietnam 25% with consideration of reducing the tax rate

China 25%

As for the PTP's borrowing, Mr. Korn is a hypocrite. As I read the borrowing numbers, the PTP administration has borrowed less than the precious Democrat administration. I am against government borrowing and deficits, but Mr. Korn was the man that borrowed for all of his fanciful spending. The reality is that the cost of debt service is so low, than Thailand can afford its debt load. Unfortunately for my investment portfolio, interest rates for borrowers, especially sovereign debt, are still rock bottom low, so there is an incentive to borrow. Banks and Investment Houses are practically giving the money away because they are sitting on trillions of euros/$$$ and they don't want to lend in the EU or the USA.

If anything the Thai rate was too high and an impediment to corporate investment and job creation.

GK, Hack lawyer at work .High intelligence, no ethics to see the facts.

[djjamie]

Shinawatra? Shinawatra? Shinawatra?

Um, She's sick. My best friend's sister's boyfriend's brother's girlfriend heard from this guy who knows this kid who's going with the girl who saw Yingluck at the Royal Thai Army's canal-dredging activities in Bangkok.... I guess it's pretty serious.

Thank you, Chalerm.

No problem whatsoever.

[moe666]

I guess the Mitt camp. is advising the Thais how to give tax cuts to the rich and tax increases to the poor. This seems to be a worldwide trend at the moment.

[DeepInTheForest]

Totally get what your saying GK and completely agree with your points.

But if as you stated the Dems borrowed vast sums (the majority of which probably need repaying, unless they repaid it all during the term of their administration) and now PTP are borrowing equally large sums give or take a few billions, if you put the borrowing of the Dems and PTP over the last few years togetherl that adds up to a lot of national debt.

Surely given the debts inherited by PTP from the Dems they should be borrowing less and would aim to be more fiscally watertight and accountable. If you have large debts is making them larger by borrowing more good economics?

Growing national debt is worthy of concern, but I think posters here often exaggerate the extent of Thailand's fiscal problems. Thai debt as a percentage of GDP is somewhere around 40-50%. (It is difficult to assess the accuracy of figures for various countries.) But some comparisons may be in order. See links below. Most OECD countries would be very happy to have Thailand's level of debt. That's not to say vigilance is not called for, especially given the level of corruption that can occur in stating these figures. But the picture may not be as dim as we tend to fear.

http://www.indexmundi.com/g/g.aspx?c=th&amp;v=143

http://www.tradingeconomics.com/thailand/government-debt-to-gdp

Scroll down on this one to see OECD countries and debt-- you can sort on debt levels to see who is highest by clicking on the column header.

http://www.gfmag.com/tools/global-database/economic-data/10394-public-debt-by-country.html#axzz23elTUDxT

http://www.economicshelp.org/blog/774/economics/list-of-national-debt-by-country/

Edited August 15, 2012 by DeepInTheForest

[webfact]

BUDGET DEBATE

Korn slams biggest budget in Thai history

BUSINESS DESK

THE NATION

Korn

BANGKOK: -- The 2013 Budget Bill yesterday was carved up by party-list MP Korn Chatikavanij of the Opposition Democrat Party, who slammed it as the highest spending in history, which includes a policy on corporate income tax cut that favours big business.

As deliberations on the final passage of the 2013 Budget Bill started yesterday, members of the Democrat Party were lined up on the first half of the day, proposing trimming of 5 per cent from the budget's set spending plan of Bt2.4 trillion. On top of this, about 42 per cent of debt to gross domestic product (GDP), will tend to rise continuously.

Korn said that he was concerned about the spending plan, which is considered the largest budget ever, while projection for revenue was about Bt2.1 trillion. That implied a deficit of Bt300 billion. Consequently, the government would have to borrow to make up the shortfall.

A study of the 2013 Budget Bill also found that government influence had been behind a majority of house committees on this matter, he said.

He believed that the estimated revenue of Bt2.1 trillion for 2013 would be collected from the public unfairly, as the corporate tax-cut policy - from 30 per cent to 23 per cent - would favour capitalists, and that would mean a loss of income of up to Bt150 billion.

"It is most likely that the government will collect more taxes from other [sources]," said Korn, asking that the government consider raising taxes from the richest sectors of the community instead.

He was also concerned about off-budget proposals, such as the use of a credit loan set at Bt350 billion, which he feared could not be spent. He understood that only Bt1 billion had gone towards resolution of the flood situation.

"When will this budget be used and will it be able to prevent possible flooding by the end of this year?" Korn asked.

In addition, he asked the government to revise its ideas, return its focus to helping people so they can stand on their feet and have a responsibility to their families. "Ministers do not need to quit from positions in cases of mistakes. But they should review some projects such as rice pledging," said Korn.

Phongsri Tharabhumi, a member of a minority house committee from the Democrat Party, said that some projects under the Budget Bill of 2013 were not clear, while some showed little time had been given for deliberation. Some proposals for the budget have no details, boards of directors and legal endorsement. Some projects appeared in duplicate budgets.

Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong, as chairman of the extraordinary house committee on deliberations of the 2013 Budget Bill, conceded that the budget allocation offers the highest spending in history. However, this amount is only Bt20 billion higher than the spending budget of 2012, he said.

"The increased budget was set in line with essential spending. The government is confident it is following the fiscal policy austerely and the revenue set at Bt2.1 trillion will not make the public suffer. Spanning of the personal income tax base is still in a position to proceed," Kittiratt said.

The corporate income tax cut policy, he said, was not a favour for capitalists, but would increase the private sector's competitiveness. Currently, other countries' corporate income taxes were much lower than those of Thailand.

He insisted there were no duplicated items in the budget allocation and the government would spend the budget efficiently.

-- The Nation 2012-08-16

[Buchholz]

Wow. Korn criticized the corporate tax adjustment????? This comes from the man that had previously said it was too high?

The corporate tax rate was not "slashed: from 30 per cent to 23 per cent. It is the implementation of the offsets to the increase in other indirect costs such as the minimum wage.

<snip>

"such as the minimum wage." ... Which they haven't fully implemented.

They've done their usual 10% of their stated pledge. That's good enough in theirs and a few others' eyes.

The only pledge that was seen through to 100% was the reduction in corporate tax... which makes the fat cats the prime beneficiary of Yingluck's first year of work.

Nice reduction of their tax without a troublesome wage hike. Sweet for them.

Yay for red democracy. Power to the common people.

.

Edited August 15, 2012 by Buchholz

[Buchholz]

As for the PTP's borrowing, Mr. Korn is a hypocrite. As I read the borrowing numbers, the PTP administration has borrowed less than the precious Democrat administration.

have another read...

BANGKOK: -- The 2013 Budget Bill yesterday was carved up by party-list MP Korn Chatikavanij of the Opposition Democrat Party, who slammed it as the highest spending in history, which includes a policy on corporate income tax cut that favours big business.

As deliberations on the final passage of the 2013 Budget Bill started yesterday, members of the Democrat Party were lined up on the first half of the day, proposing trimming of 5 per cent from the budget's set spending plan of Bt2.4 trillion. On top of this, about 42 per cent of debt to gross domestic product (GDP), will tend to rise continuously.

Korn said that he was concerned about the spending plan, which is considered the largest budget ever, while projection for revenue was about Bt2.1 trillion. That implied a deficit of Bt300 billion. Consequently, the government would have to borrow to make up the shortfall.

[Ricardo]

Perhaps the government can raid the piggy-bank again, and stuff some of their excessive-spending onto the Bank of Thailand, releasing more of their own borrowing to spend on the rice-pledging scheme, which somehow seems to need to be totally refinanced again for its second-year ?

Hopefully the government will be able to announce, during the Budget-Debate, which ministries have under-spent their 2012-budgets as a result of good-housekeeping ?

Or perhaps not ! Spend ! Spend ! Spend ! Oink Piggies Oink !

[Woodcaulk]

I guess the Mitt camp. is advising the Thais how to give tax cuts to the rich and tax increases to the poor. This seems to be a worldwide trend at the moment.

Yeah, its a real shame those really awful rich bastards!!! They should be taxed and taxed and taxed until its no longer feasible let alone profitable to create goods, services or livelihoods for our beloved poor

[DeepInTheForest]

I guess the Mitt camp. is advising the Thais how to give tax cuts to the rich and tax increases to the poor. This seems to be a worldwide trend at the moment.

Yeah, its a real shame those really awful rich bastards!!! They should be taxed and taxed and taxed until its no longer feasible let alone profitable to create goods, services or livelihoods for our beloved poor

Recent years have seen profits flowing at an unprecedented rate to the upper tenth of one percent, while real wages have fallen. This is a global trend. Coupled with tax cuts in developed countries such as the US, the danger now is that economies cannot recover from recession because the population has no money to spend on those widgets that your beloved rich have created for them.

http://www.george.irvin.com/D%26C.pdf

http://independentre...mic-crisis.html

https://performance....ADE_EXTRACT.PDF

Edited August 16, 2012 by DeepInTheForest

[geriatrickid]

Totally get what your saying GK and completely agree with your points.

But if as you stated the Dems borrowed vast sums (the majority of which probably need repaying, unless they repaid it all during the term of their administration) and now PTP are borrowing equally large sums give or take a few billions, if you put the borrowing of the Dems and PTP over the last few years togetherl that adds up to a lot of national debt.

Surely given the debts inherited by PTP from the Dems they should be borrowing less and would aim to be more fiscally watertight and accountable. If you have large debts is making them larger by borrowing more good economics?

I can't argue your point because you are right. I make no secret of my respect for the former PTP finance minister that wanted to do what you suggest. He was forced out and replaced by someone who's willingness to borrow is at odds of my view that there is a need for restraint. I certainly am not arguing to add more debt. This is a fundamental disagreement I have with the PTP. I know all the sharp bizz school men and women will sneer at this, but now is not the time for more debt. On this you are 100% correct. Sadly, your concerns will become more applicable as the bad news in the EU hits the fan.

[geriatrickid]

I guess the Mitt camp. is advising the Thais how to give tax cuts to the rich and tax increases to the poor. This seems to be a worldwide trend at the moment.

Yeah, its a real shame those really awful rich bastards!!! They should be taxed and taxed and taxed until its no longer feasible let alone profitable to create goods, services or livelihoods for our beloved poor

The key problem is an efficient tax system. The honest companies are paying their taxes, while many others have been using accounting loopholes and devious means to avoid paying their fair share. The end result is that the higher corporate taxes penalized the honest people and the foreign companies that at least were paying their taxes. The reduction will help hese entities. The tax evaders will continue to evade until they are caught and punished.

[MaxLee]

Pointing out to his position alone as Thailand's Finance Minister, Korn belongs to the RICH and GREEDY corrupt politics elite himself.

Just a diversion.

[SuneeTH]

Pointing out to his position alone as Thailand's Finance Minister, Korn belongs to the RICH and GREEDY corrupt politics elite himself.

Just a diversion.

Robin hood govt giving tax payer money to poor rice farmers. No wonder RICH and GREEDY Korn is complaining in.

[OzMick]

Pointing out to his position alone as Thailand's Finance Minister, Korn belongs to the RICH and GREEDY corrupt politics elite himself.

Just a diversion.

Except that he is NOT Thailand's Finance Minister.

[ratcatcher]

Pointing out to his position alone as Thailand's Finance Minister, Korn belongs to the RICH and GREEDY corrupt politics elite himself.

Just a diversion.

Robin hood govt giving tax payer money to poor rice farmers. No wonder RICH and GREEDY Korn is complaining in.

No. More like Robbing Hoods government giving taxpayer money to "Much the Miller" men and not much to poor Little John farmer.

Meanwhile Maid Millions goes shopping. A real "Paragon of Virtue"

Korn is rich, and may possibly greedy, but he can see a scam when it's happening.

Edited August 16, 2012 by ratcatcher

[SuneeTH]

Pointing out to his position alone as Thailand's Finance Minister, Korn belongs to the RICH and GREEDY corrupt politics elite himself.

Just a diversion.

Robin hood govt giving tax payer money to poor rice farmers. No wonder RICH and GREEDY Korn is complaining in.

No. More like Robbing Hoods government giving taxpayer money to "Much the Miller" men and not much to poor Little John farmer.

Meanwhile Maid Millions goes shopping. A real "Paragon of Virtue"

Korn is rich, and may possibly greedy, but he can see a scam when it's happening.

OK. Agree with you that no scam in Mark/Korn price guarantee scheme, when no rice need to be shown to go collect the free govt money. Just a printed receipt, which anyone in KSR can fake in minutes.

Edited August 16, 2012 by SuneeTH

[animatic]

When the Dems came in PPP had completely ignored the world wide economic crash going down around them for several long tedious months. Korn was forced to borrow more then because that was the only way to stave off a crash for Thailand. But to heap more on top of that necessary expenditure and to do so at a record setting pace is absurd. Sure the flood caused greater expenditures, but they have gone way way past that necessity.

And without a doubt this is not the time in regional and world economic movement to go head long into massive international debt.

[Woodcaulk]

I guess the Mitt camp. is advising the Thais how to give tax cuts to the rich and tax increases to the poor. This seems to be a worldwide trend at the moment.

Yeah, its a real shame those really awful rich bastards!!! They should be taxed and taxed and taxed until its no longer feasible let alone profitable to create goods, services or livelihoods for our beloved poor

Recent years have seen profits flowing at an unprecedented rate to the upper tenth of one percent, while real wages have fallen. This is a global trend. Coupled with tax cuts in developed countries such as the US, the danger now is that economies cannot recover from recession because the population has no money to spend on those widgets that your beloved rich have created for them.

http://www.george.irvin.com/D%26C.pdf

http://independentre...mic-crisis.html

https://performance....ADE_EXTRACT.PDF

Yeah, I read all your copy and paste....nonsense and your ignorance still abounds. Its really quite simple to grasp. Higher tax rates mean lower profit margin for me. Lower profit margin for me means I have less to invest and quite frankly am less inclined to put my investment dollars at risk in assets that potentially create jobs. Lower my tax rates and my profit margin increases inclining me to put more of my investment dollars at risk in assets that have the potential of creating jobs with the added benefit of broadening the tax base and consequential tax revenues to the govt. Your mistake is looking at it as a "zero-sum" game. It only approaches "zero-sum" when contraction at the top occurs. To take it a step further, the entire concept of taxing income is counter-intuitive as it taxes work,savings and investment. Eliminate this and convert to taxing consumption broadly and thinly and the results will be a far more robust and broad economic base. The real culprit is of course the "elite ruling class" in govt. who view the taxpayer as a bottomless pit of money which they draw on and spend/redistribute irresponsibly......evil at its ugliest.

Edited August 16, 2012 by Woodcaulk

[khunken]

I guess the Mitt camp. is advising the Thais how to give tax cuts to the rich and tax increases to the poor. This seems to be a worldwide trend at the moment.

Yeah, its a real shame those really awful rich bastards!!! They should be taxed and taxed and taxed until its no longer feasible let alone profitable to create goods, services or livelihoods for our beloved poor

Recent years have seen profits flowing at an unprecedented rate to the upper tenth of one percent, while real wages have fallen. This is a global trend. Coupled with tax cuts in developed countries such as the US, the danger now is that economies cannot recover from recession because the population has no money to spend on those widgets that your beloved rich have created for them.

http://www.george.irvin.com/D%26C.pdf

http://independentre...mic-crisis.html

https://performance....ADE_EXTRACT.PDF

Yeah, I read all your copy and paste....nonsense and your ignorance still abounds. Its really quite simple to grasp. Higher tax rates mean lower profit margin for me. Lower profit margin for me means I have less to invest and quite frankly am less inclined to put my investment dollars at risk in assets that potentially create jobs. Lower my tax rates and my profit margin increases inclining me to put more of my investment dollars at risk in assets that have the potential of creating jobs with the added benefit of broadening the tax base and consequential tax revenues to the govt. Your mistake is looking at it as a "zero-sum" game. It only approaches "zero-sum" when contraction at the top occurs. To take it a step further, the entire concept of taxing income is counter-intuitive as it taxes work,savings and investment. Eliminate this and convert to taxing consumption broadly and thinly and the results will be a far more robust and broad economic base. The real culprit is of course the "elite ruling class" in govt. who view the taxpayer as a bottomless pit of money which they draw on and spend/redistribute irresponsibly......evil at its ugliest.

Absolute &lt;deleted&gt;.

A fair tax rate is that which the rich pay more than the poor. There is no evidence that lowering the tax rate of big business will lead to more investment. It certainly puts more money into their pockets which means more into shareholders' pockets. Big business will find the cheapest place to invest which is why the largest companies in the world have pocketed tax decreases (in the US especially) and created jobs in China, Vietnam, Indonesia etc. It's cheap labour that is the main attraction.

Secondly, taxing the employed is a much fairer system than relying on consumption taxes (e.g. VAT) which hurt the poorest sector the most.

With regard to the current government's borrowing there are 2 problems. One is off-budget borrowing which the PTP & its predecessors loved because it kept the percentages artificially low. The second is the total lack of transparency in spending all the amounts borrowed. Fiddling with the BOT reserves is a possible no. 3