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  1. #1
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    Thailand is getting it right

    Nation reports today that Thailand had a $21.6 Billion dollar surplus last year and increased their reserves by $55 billion over the last 3 years. Only 1/6 of the population is currently being taxed. The US trade deficit is averaging 26Bil a month.
    Does this tell anything about proper taxation and the economy? Correct me if I am wrong,
    there is a hotel tax, a gas tax and an VAT tax. Is that how Thailand raises money domestically? That surplus is exports to the rest of the world? Yes or No.

  2. #2
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    Trade surplus ,wikepedia 2007

    21 Thailand 15.765 bn dollars surplus

    181 United States -731.214 bn dollars deficit

    No later fig. in there,but similar to yours.

    This means that Thais earn more than they spend by 250 dollars.

    and the yanks spend more than the earn by nearly 3000 dollars.

    a recipe for disaster in USA case.

  3. #3
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    tax has nothing to do with a trade surplus. Germans are taxed until they drop and still we have a huge trade surplus.

  4. #4
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    Quote Originally Posted by mtone9317 View Post
    Nation reports today that Thailand had a $21.6 Billion dollar surplus last year and increased their reserves by $55 billion over the last 3 years. Only 1/6 of the population is currently being taxed. The US trade deficit is averaging 26Bil a month.
    Does this tell anything about proper taxation and the economy? Correct me if I am wrong,
    there is a hotel tax, a gas tax and an VAT tax. Is that how Thailand raises money domestically? That surplus is exports to the rest of the world? Yes or No.
    Another four billion and they can pay for those fighter jets they just ordered for the army

    What about the 400 Billion baht budget deficit?

  5. #5
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    Quote Originally Posted by Fabian View Post
    tax has nothing to do with a trade surplus. Germans are taxed until they drop and still we have a huge trade surplus.
    same are denmark

  6. #6
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    Is the budget deficit projected spending? If the reserves are increasing is there a deficit and if so which country lends Thailand the money?
    I really don't know what is going to happen in California because they have scraped the bottom of the barrel and there is nothing left and Uncle Sam has no money to lend. I really don't think anyone is going to lend the state money because the state is nearing default.

  7. #7
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    Thailand is an exporter, and still third world

    you can't compare it with the US,

    apple and oranges,

  8. #8
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    Quote Originally Posted by DrB0b View Post

    Another four billion and they can pay for those fighter jets they just ordered for the army
    I think they were hoping to use Thaksins frozen cash for that.

  9. #9
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    I’m afraid that 3 separate things are being discussed that are not directly related, though they are all economic indicators.

    The current government budget is running at a deficit (About 4% of GDP), which means that the government is spending more money then it takes in from taxes. This started when Thaksin started spending money on his various “populist” programs in Issan, and continue today with the economic stimulus programs. The three main tax revenues for Thailand are Income (corporate and individual) VAT, and customs duties. Deficits are funded by the government selling bonds.

    Trade Surplus/deficit. Also know as “balance of trade”. This is the value of exports minus the value of imports. As an exporting country, Thailand usually has a positive balance of trade. When the price of oil went over $100 in 2007, Thailand actually ran a trade deficit because of the cost of oil imports. Note that since virtually all trade in Thailand is done by private companies and not the government, this just an indicator and nobody actually holds any money for this other then the individual corporate profits.

    Foreign Currency Reserves. These are assets of the central bank held in different reserve currencies, mostly the US dollar, and to a lesser extent the euro, the UK pound, and the Japanese yen, and used to back its liabilities, e.g. the local currency issued, and the various bank reserves deposited with the central bank, by the government or financial institutions. Thailand reserves continue to grow, mainly because the Baht continues to strengthen and the BOT makes money on the forex deals it does. I think Thailand is at something like 140 billion USD in Foreign Currency Reserves.

    Note most of this is copy and paste from Wiki, I barely understand how all this works.
    TH

  10. #10
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    seen singapore was #10 on the list.

    good for them.

    but what the hell do they export? i know they make most of their $$ by banking, shipbuilding, commerce & business and the like. but what is it exactly that they export? they grow basically nothing and almost all their water even comes from malaysia. basically EVERYTHING they consume on a daily basis is imported, and i mean EVERYTHING.

    just wonderin'...
    Last edited by galaxytrash; 09-02-2010 at 09:52 PM.

  11. #11
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    Quote Originally Posted by galaxytrash View Post
    seen singapore was #10 on the list.

    good for them.

    but what the hell do they export? i know they make most of their $$ by banking, shipbuilding, commerce & business and the like. but what is it exactly that they export? they grow basically nothing and almost all their water even comes from malaysia. basically EVERYTHING they consume on a daily basis is imported, and i mean EVERYTHING.

    just wonderin'...
    Singapore has a huge manufacturing industry, mostly electronics. They also have a large oil refining and petro chemical sector. Manufacturing is slightly larger then the financial sector, each contributing something likes 25% to the GDP.
    TH

  12. #12
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    Quote Originally Posted by Thaihome View Post
    Thailand reserves continue to grow, mainly because the Baht continues to strengthen
    actually it's the other way round, the baht strenghetns because the reserves continue to grow, and they grow because of the continuous inflow of foreign currency due to trade surplus.
    Quote Originally Posted by Thaihome View Post
    and the BOT makes money on the forex deals it does.
    again it's the opposite, as the $ are the bank assets and the baht the bank's liabilities, if the liabilities revalue compared to the assets the bank gets a loss, not a gain. That adds to what the bank is already losing because of the interest rates difference between the two currencies (the $ pays lower rates compared to the baht)

  13. #13
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    Quote Originally Posted by Fabian View Post
    tax has nothing to do with a trade surplus. Germans are taxed until they drop and still we have a huge trade surplus.
    well tax is one of the costs a manufacturer has to pay, so the higher it is the less competitive he is on the world market.
    Thailand tax rate for companies is 30% , lower than Europe but not extraordinarily low. Thailand strength on the world market comes mainly from its cheap labor cost, together with a certain development and technological advantage compared to other countries with even cheaper manpower.

  14. #14
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    Quote Originally Posted by Thaihome
    Foreign Currency Reserves.
    Quote Originally Posted by Thaihome
    Thailand reserves continue to grow,
    I know. I'm such a Sucker

  15. #15
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    Quote Originally Posted by Thaihome
    Foreign Currency Reserves. These are assets of the central bank held in different reserve currencies, mostly the Danish Krone, and to a lesser extent the Dollar,
    Oh, man

  16. #16
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    Quote Originally Posted by wefearourdespot View Post
    Quote Originally Posted by Thaihome View Post
    Thailand reserves continue to grow, mainly because the Baht continues to strengthen
    actually it's the other way round, the baht strenghetns because the reserves continue to grow, and they grow because of the continuous inflow of foreign currency due to trade surplus.
    Agree. But it is sort of a chicken and egg thing.
    Another large part of the inflow is capital for investment, particularly the SET.
    Quote Originally Posted by Thaihome View Post


    and the BOT makes money on the forex deals it does.
    Quote Originally Posted by wefearourdespot View Post
    [again it's the opposite, as the $ are the bank assets and the baht the bank's liabilities, if the liabilities revalue compared to the assets the bank gets a loss, not a gain. That adds to what the bank is already losing because of the interest rates difference between the two currencies (the $ pays lower rates compared to the baht)

    I was more referring to the forex trading the BOT is suspected of doing trying to keep the Baht from strengthening more. Sort of the opposite of '97 when they wasted the entire reserve trying to hold the baht.
    TH

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