14509: Lyall: more on gaz and taxes (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: J.David <david@lyalls.net>

Ok. I'll take some time.

I did not say that Duvalierism subsidized gas. I said:
"The whole arrangement of the government buying petroleum then passing it
along to the wholesalers with a fixed margin is a strange statist remnant, probably
from Duvalierism?

Once it was designed to make a profit for the government, in lieu of
taxes. Once it starts diverting money from social needs it becomes very counter productive."

Now, "designed to make a profit for the government" does not mean a subsidy, no?
Four years ago gasoline was two US dollars per gallon to my recollection. Today it is
about the  same, after the price increase.

The "statist remnant" to which I refer is the practice of the government buying the
gas then passing it along to private retailers to sell at a fixed margin.

When did this practice begin? i don't know but would be interested if anyone does.
Why do I suspect that  this was instituted by the Duvalier revolution? My understanding
is that they took over many industries during the 60's and  70's. I have read this but
cannot quote sources.

One good result of this  practice is that fuel costs the same everywhere in the country.
Fuel in Hinch  s the same price as Port. It costs far more to sell it there of course, due
to the condition of the roads. How does the government get the gasoline distributors
to build modern gas stations out in the hinterland? I don't know.

What alternative do most countries use? They let the private sector buy and sell
(sometimes with profit controls) and set a tax on top of that. Even russia does that  now.
How would we get gasoline to Belle Anse and Las Cahobas at a reasonable price?
 A difficulty, yes. More discussion.

Taxes. The question. Collecting sufficient tax is the main problem in underdeveloped  countries.
Mexico collects a far smaller share of its GDP in taxes than the usa. Haiti is surely way  farther
down the scale. Underdevelopment is a vicious cycle.

Yet  more tax  you say? I suspect that income tax is non existent in haiti. Property tax  is  what
I was referring to. By name.  Property tax. This has been mentioned before.
Many many properties pay no  tax at all, yet the property is never confiscated.
Vast amounts of state lands are used with no payment at all, or even any conditions
on its use. (read, destructive agricultural practices and wholesale burning for chabon)

Now, would people have confidence that tax collected  would be used for public benefit?
That is the  problem. They don't. Neither high nor low has faith that a haitian government
would use more tax revenues for public benefit.

What  could be subsidised to better effect than gasoline?
How about schools? Have any new schools been  built by the haitian government
since the flight of jean claude? I doubt it.

Luckily haiti does not have a national airline to wast money on. Let the usa taxpayers
throw money at that industry. Tariffs on imported  food could usefully be used  to
subsidise haitian farmers. The duvaliers did that. Most normal countries do that
when they can afford it.

So, to sum up. Gasoline has only been subsidized accidentally for the past year or less.
Formerly (and now) it was sold at a profit to the haitian state.
Duvaleirs never sold  gasoline at a loss.
Many things could be subsidised to better  effect than  automobile use.

How is that? Was I clear in my meaning?