Re: El Salvador has become the first country to make #Bitcoin legal tender! 🇸🇻
El Salvador is about to approve a new law lowering tax rates. This can lead to foreign direct investment in the country, job creation and economic expansion. I think there are some risks and challenges in the bold steps they are taking. Lowering the income tax rate may reduce government revenue. In many cases, income inequality may be exacerbated, as the wealthy benefit more from tax cuts than low-income individuals.
Lowering the income tax rate could be a strategic move by El Salvador to attract global investment. The key challenge now is whether this move can sustain the economy long-term in the future.
Source
Lowering the income tax rate could be a strategic move by El Salvador to attract global investment. The key challenge now is whether this move can sustain the economy long-term in the future.
Source
I cannot agree with your argument, since lowering the income tax rate in El Salvador will only reduce the revenue in the economic government coffers. But those with low incomes will benefit the most. And the lower the earning rate the more people will move to Bitcoin in any direction. So as per your suggestion there is disadvantage in one aspect but advantage in all other aspects, so I would be in favor of reducing income tax rate. The President of El Salvador, Nayib Bukele, is knowledgeable enough about cryptocurrencies, that the law he passes will be the best for the people. Because he made laws thinking about the people of the country.
You don't need to disagrees with this, when making strategies to help boost an economy, then you have to adopt a means that will make such attractive to the potential and intending investors to all come into making investments in your country and also do this without having high levied fees of taxation on them, this will make them to have a suitable environment to make business and profits awhile what El-Salvador stand to gain is the increase in numbers of these investors and thereby boosting its economy and they will indirectly make the recover of the discount made through the increasing numbers of these investors, they are not doing this because they wanted to lose, but are being considerate to make the country a business and commercial hub in boosting the economy through its bitcoin adoption, such could indirectly increase their revenue generation income as well and every other persons remains unaffected with this.