Costa Rica is an interesting mishmash of neoliberal economic policies and some radical (non-traditional) ideas. non-traditional ideas: * no army * generate m

Costa Rica is an interesting mishmash of neoliberal economic policies and some radical (non-traditional) ideas. non-traditional ideas: * no army * generate most government revenue from sales taxes rather than income taxes * firm commitment to prioritize economic growth over social spending (Costa Rica has among the highest rates of inequality in the OECD) * much higher levels of education spending (7+% of GDP) (but PISA scores in the bottom half of Latin America and they are falling) That said, it has problems common to Latin America: * Low test scores and poor educational outcomes * Declining fertility leading to pension shortfalls * Black/gray markets where a large part of the labor force is employed informally and thus does not make pension contributions or pay income taxes In terms of taxation, there is a 13% sales tax on everything except food and medicine. They do have an income tax, but it's a weird hybrid between a flat tax and a wealth-surcharge, in that the majority of the population pays no income tax at all. Median income in Costa Rica is about 6K and average income is 9K. But your first $10K is tax exempt, those earning 10-18K pay 10%, and the highest bracket is 15%. That is a very different structure than you find in western nations which have upper tax brackets in the range of 40% or even 80%. There is a separate income tax for self-employed workers which goes up to 25%, but again very few self-employed businesses will earn. Costa Rica also has a progressive property tax, starting at .25% and going to .55% with the highest bracket applying to 3 million dollars or more. It has 7 property brackets. Thus there are more than twice as many property tax brackets as there are income tax brackets! Yet because those brackets, like the income brackets, only hit the very high end, overall Costa Rica collects the among the least revenue from income and property taxes compared to the rest of the OECD. It is almost entirely dependent on sales taxes, excise taxes, and social security contributions to fund its budget. It also has a number of free trade zones in which businesses don't pay any taxes at all (neither income, nor import/export) if they meet certain conditions. source: https://www.oecd.org/economy/surveys/costa-rica-2020-OECD-economic-survey-overview.pdf https://www.oecd.org/economy/surveys/costa-rica-2020-OECD-ec...