Finally the Supreme Court has ruled that EVAT is constitutional. So perhaps we are not a Mickey Mouse country after all.
It couldn't have come sooner for the fiscal agenda of the administration. The 2006 budget deficit was conditional on EVAT being upheld. If the Supreme Court had ruled otherwise, either the 2006 budget needs to be downsized, or a bigger deficit would have to be planned - further increasing the national debt and damaging our country's reputation further in the financial markets.
The country's tax effort (revenue as a ratio of GDP) has dipped in recent years, and EVAT seems to be the best bet to lift that up again, despite its shortcomings. I hate higher taxes just like the next guy, but I need to think beyond my own pocket when discussing real economics.
Expect the usual fuss and bluster from the motley crowd of EVAT detractors and grandstanders. (They have another 15 days to file a motion for reconsideration, as I gather.) I have a simple question for them: what's the alternative? If they start talking about cancelling debt payments again, ask them the specifics. How would they deal with the repercussions on financial markets? Hey, they have some sloganeering to deal with that - institute nationalist industrialization! Impose national self-sufficiency! Close the economy to foreign trade and investment! Then the economy will prosper!
This is about the closest you can get to magical economics.