Prepare for more tax burdens

kahramanmarasThe earthquake, which caused great destruction in 10 provinces including Gaziantep, Hatay, Osmaniye, Malatya, Adana, Diyarbakır, Urfa, Adıyaman and Kilis, became a major disaster and deeply shook Turkey. Tens of thousands of people lost their lives in the earthquake, which became the largest disaster in the history of the Republic, and the loss of life is increasing by the day. While the deepest crisis in the country’s history is going through, the economic cost of the earthquake, which turned into a disaster as a result of a series of oversights, presents us with a serious problem.

We spoke with economist Atilla Yeşilada about the size of the resource required for the restructuring of the region and how to obtain it. Yeşilada stated that the earthquake had two dimensions, namely loss of wealth and loss of production, saying that the bill, which has not yet been finalized, could reach as much as 100 billion USD. Stating that this necessary resource will be obtained by printing money and borrowing from abroad, especially taxes, Yeşilada said, “Prepare to pay more taxes.”

POOR MANY INFLUENCES

Pointing out that the average income in the region is well below that of Turkey and that the public will largely cover the damage, Yeşilada said: “The public makes all the expenses through taxes collected from citizens or through loans. Traditionally, taxes are collected first on fuel, alcohol, and tobacco, and prices can become unaffordable. However, this is not enough to fill the pool. Therefore, a wealth tax will be needed. It is coming to light that rich people can pay taxes once on their wealth and income. I prefer the wealth tax to the consumption tax. Because excise taxes hit the poor hardest, they don’t hit the budgets of the rich.

There is no other way to print money.

Stating that money will be printed and there is no other option and that this will increase inflation, Atilla Yeşilada said: “External borrowing will also increase, but because our credit rating is low, its cost is very high. Citizens will also pay the bill for the loan at 8-9 percent interest in dollar terms,” she said. Anticipating that inflation will stay in the 50-60 percent band until the elections, Yeşilada said that if the current government stays in power, triple digits will be seen.

Political tension could rock the currency market

Even before the earthquake, it was difficult for the economy to get out of June without experiencing a serious depression,” Yeşilada said, adding: “Therefore, it is believed that May is even more difficult now… The current account deficit and inflation will rise more than expected, unemployment will rise. Political tensions could rock the currency market. “Even before June, we may experience a serious currency shock,” he said. Yeşilada stated that there is no reasonable way to postpone the elections and that if they insist, deception will turn into brute force, saying: “The system does not allow this, the elections will be held in June. Otherwise, there will be such a burden on legitimacy that the consequences will be very serious, ”he said.