RI Kejar Target Ekonomi 8%, Ini Kata Mantan Penasihat Trump

Summary

In this insightful discussion, a renowned economist discusses global economic trends, emphasizing the importance of lower tax rates, sound money policies, and free trade. He advocates for a smaller, less interfering government, particularly in emerging economies like Indonesia, where excessive taxation and corruption hinder growth. The expert stresses the need for public trust in government spending and the creation of high-paying jobs over focusing on inequality. He highlights Indonesia's potential for prosperity if policy reforms encourage investment, entrepreneurship, and economic growth while minimizing government interference. The economist's advice offers hope for Indonesia's economic future, aligning with global shifts toward freer trade and peace.

Takeaways

• 😀 Lower tax rates, less government spending, and better regulations are key to fostering economic growth globally.
• 😀 A freer trade environment, particularly between the US, China, India, and Pakistan, will lead to a more prosperous world economy.
• 😀 Indonesia and other Southeast Asian nations must avoid high tax rates, which can hinder prosperity and business growth.
• 😀 Governments should focus on light taxation and minimal regulation to allow the private sector to thrive and generate prosperity.
• 😀 Historical success in the US was achieved without income or corporate taxes, relying instead on tariffs and land sales—Indonesia should follow this model.
• 😀 Tax compliance is better achieved with low tax rates, which reduce the incentive to cheat on taxes and ensure fairness.
• 😀 Public trust in government spending is critical for improving tax compliance—people will pay taxes if they believe the government is using funds responsibly.
• 😀 Corruption in governments can undermine public trust, making it vital for governments to be honest and transparent with tax revenue usage.
• 😀 Tax reforms should focus on creating high-paying jobs for the poor rather than focusing on reducing inequality through taxes on the rich.
• 😀 Economic prosperity, achieved through job creation, will benefit all social classes, improving the standard of living for everyone, including the poor.
• 😀 Indonesia's ambition for 8% annual growth can be supported by minimizing taxes, reducing regulations, and encouraging private sector activity, with the government providing minimal interference.

Q & A

How do you see the current global situation affecting investments and entrepreneurship?

The global situation has led to caution among investors and entrepreneurs. With the uncertainty brought about by policy changes, particularly in the U.S., many are holding back investments and expansions. However, the new policies, such as lower tax rates and better regulations, are expected to change sentiments and stimulate investment and entrepreneurship.

What sectors should be maintained to improve economic sentiment and ensure growth?

The focus should be on sectors that promote free market principles and growth. Ensuring sound money policies, freer trade, and lower tax rates will provide the right incentives for investments and entrepreneurship. Sectors supporting these changes, such as trade, manufacturing, and industries linked to economic growth, should be prioritized.

How does the Laffer Curve apply to Indonesia's tax policies?

In Indonesia, the Laffer Curve suggests that beyond a certain point, higher tax rates can reduce total revenue. This is particularly true in developing countries like Indonesia, where tax rates should be lower than in developed nations to prevent stifling economic growth. Lower taxes and less regulation are recommended to create prosperity and avoid killing the economy.

Is it possible for Indonesia to lower specific taxes like corporate or VAT and still increase total revenue?

Yes, lowering taxes such as corporate or VAT could potentially increase total revenue through better compliance and more economic activity. A lower tax burden would incentivize businesses and individuals to comply with tax laws, which would lead to higher revenue as the economy grows.

What are the most effective strategies for improving tax compliance in developing countries like Indonesia?

The most effective strategy is to lower tax rates. The higher the tax rate, the greater the incentive for people to evade taxes. Ensuring that taxes are fair, and that the government is seen as using the funds responsibly, is crucial. Public trust in the government's spending decisions will encourage voluntary tax compliance.

How important is public trust in government spending for improving tax compliance?

Public trust in government spending is vital. If citizens believe their tax money is being spent wisely and transparently to benefit the nation, they are more likely to comply with tax laws. Corruption or misuse of funds can lead to widespread tax evasion and a lack of compliance.

How can Indonesia design supply-side reforms that also promote inclusive growth?

Supply-side reforms should focus on creating good, high-paying jobs. The goal is to make the poor richer, not to reduce inequality by taxing the rich. Economic prosperity will help all classes, as increasing jobs and prosperity for the poor will lift everyone. The focus should be on growth, not wealth redistribution.

What are the key measures that Indonesia should prioritize to achieve an 8% growth target by 2028?

To achieve 8% growth, Indonesia should focus on low taxes, minimal regulation, sound monetary policies, and free trade. The government should create an environment that allows entrepreneurs and businesses to thrive by minimizing interference, ensuring the rule of law, and fostering private-sector-driven growth.

What is the relationship between lower taxes and fostering a thriving economy?

Lower taxes incentivize individuals and businesses to invest, grow, and create jobs. High tax rates discourage economic activity and compliance. By reducing tax rates, governments can stimulate growth, increase compliance, and ultimately raise more revenue through increased economic activity.

What message does the speaker have for Indonesian policymakers ahead of their economic ambitions?

The speaker advises Indonesian policymakers to focus on creating prosperity through lower taxes, minimal regulation, and a free-market economy. The government should avoid taxing the nation into poverty and instead foster an environment that supports private sector growth. The goal should be to let Indonesians achieve economic prosperity on their own, without heavy government interference.