The COL, people, and restaurants here in David are great, but still look forward to returning to Rohrmoser.

However, I’m not sure you pad them by a lot. Almost half the taxes you list are either fees for services or
offsets of costs the country incurs as a result of taxpayers’ lifestyle choices.

A tax to support the fire department,
for example, is just a fee for service. If this tax is higher for some people’s than others, that usually only reflects the fact that they are protecting more valuable property. To a large extent, even if people don’t use it, a health care tax falls into the category of a fee for service. Since the taxpayer might use the medical system (even if they don’t plan to) paying a tax to it is about like paying a tax to the fire department, just the cost of insurance. Likewise, though in this case a voluntary tax, the corporation tax is really a fee for service. Corporations give their owners certain special legal privileges and no one is forced to open corporations. Anyone
who wants these special privileges therefore pays a for them.

You also paid a fair amount of taxes
associated with your motor vehicle(s). Since cars inflict a lot of
negative externalities onto a society, fairly high taxes on them only really offset these negative externalities. Also, especially in Costa Rica, nobody has to own a personal motor vehicle—it’s rather a lifestyle choice—so if anyone chooses to drive, there’s no injustice in taxing them to cover the costs the society incurs as a consequence of their choice. I seriously doubt that the government made money off of you from these taxes; it probably only broke even.

Where the government did seem to make money off you is in property and sales taxes. My goodness, you paid a lot of both.

True, by owning real estate you
indirectly raised the cost of real estate for Ticos, and therefore
ought to have been compelled to compensate, but it sure seems to me that you overpaid this compensation. I think the government profited from a good chunk of the property taxes you paid.

With respect to the sales taxes you
paid, I’m baffled by how a couple could manage to buy enough stuff to pay this amount of sales taxes. Odds are that a good chunk of your
sales taxes are attributable to a few big ticket items (including possibly a car, the taxes for which should probably go into another category), but regardless of the explanation, it’s pretty clear that the government profited from your sales tax payments.

So let me just concede your point that on the balance the Costa Rican government profited from your presence in the country.

However, the economy and society in general may not have benefited as much. True, insofar as the
government profited from you and it used your money for socially
beneficial things, your overpayment of taxes did help Costa Rica more
generally, but I’ve already conceded the tax point and want to move
onto others.

Another credit you may deserve is for hiring employees. However, as I understand it, you mainly hired
domestics, so weren’t providing people with particularly good jobs
in the sense of either their compensation at the time or providing them with opportunities for upward mobility. Worse, you probably hired Nicas, since most domestics are Nicas, but even if you hired Ticos, you still increased the demand for the jobs that attract Nica migrants. This in turn burdens the immigration system here, while it
also burdens the Caja and other public services, since low-wage
workers don’t as a rule pay taxes sufficient to offset the costs they
impose on the government. Thus, while on one hand you can pat
yourself on the back for providing jobs for individuals eager to have
them, on the other hand you did them few longterm favors and probably placed additional burdens on the society. On the balance, I would conclude that your hiring employees was a net wash, neither
especially beneficial nor especially harmful to the society.

Where it appears that you did
contribute economically to the society was in your consumer spending. In general, I doubt that consumer spending is anywhere near as helpful to the local economy as gringos believe it is, since at the
lower spending ends most of it only supports service personnel
(cashiers, wait staff, etc.) in dead end jobs. However, you and your
wife spent a lot, and since some of this spending does indirectly
support farmers, manufacturers, accountants, and so on, I think you
can take credit for having supported Costa Rica’s economy significantly more than most gringos.

Mind, you may have supported the
society in non-financial ways too. Some gringos do. They tutor
children, participate in environmental programs, even sometimes lend their expertise to Ticos. Money isn’t the whole of it.

Yet I think we can fairly conclude that your contribution of money—both to the government and to the private sector—benefited Costa Rica, so we really don’t need to go into the non-financial stuff.

However, as I opened by saying, your situation may illustrate why Costa Rica would want wealthy gringos, but it doesn’t illustrate why it would want poorer ones—and most gringos are much poorer than you.

Nobody knows the median income of gringos in Costa Rica, but my guess is that it’s somewhere south of $2000 a month. Of course, pensionado status still only requires
$1000 a month and there are gringos like me with permanent residency who don’t have to have any income at all. However, just my
impression, most gringos have incomes higher than $1000 a month. The average Social Security benefit in the US is around $1300 a month, and while some gringos live on this or less, others double it with a pension or similar retirement plan. Based upon my acquaintance with
dozens of gringos in Costa Rica I’ve known well enough to have a
sense of their incomes, I think Social Security is the mainstay for
most, although most have some additional income from another source. My impressions conform to the results of an informal survey some gringos conducted a couple years ago showing the average incomes to be in the $1500 – $2000 range.

Now, if we estimate the tax burden on a single gringo in Costa Rica with a $2000 a month income, I come up with a total annual tax in the neighborhood of $3000. This amount includes sales tax, their portion of the property taxes their
landlords probably pay on their behalf, various nuisance taxes, the
portion of their bus and cab fares that go to taxes, and the full
health care tax on their income, even though we know that few pay
this tax in full. (The ARCR even used to have a sweetheart deal for
its members that allowed them to pay the tax only on the minimum
amount required for their residency category rather than their true
higher incomes.) I am also assuming that the gringo has bothered with legal residency, which we know that around two-thirds don’t bother with. Those who don’t also don’t pay the health care tax,
which according to my calculations make up over half of the total
$3000 annual tax bill, even though they still receive free emergency
medical care.

Does $3000 cover the cost of the
gringos’ presence in Costa Rica? It doesn’t seem to. If we just
divide the national budget by the population of adults, we
immediately see that each adult needs to pay on the average of $4800 a year in taxes to the national government for it to break even. OK, the national budget is bloated and needs to be cut, but the fact is that this is what it is now, and the average gringo with a $2000 a month income isn’t paying his fair share.

Worse, some of these average gringos are placing more of a cost burden on the government than the average Ticos. Chiefly, since they are older and more apt to have health problems than younger people, yet pay a health care tax that doesn’t increase with age, they sometimes receive far more in health services than they pay in health care taxes.

So on the average the gringo expats cost the government more than they pay in taxes.

Do they help the economy in other ways? Well, they don’t help the local housing market. Since they are able
to pay higher rents than the Ticos, they tend to drive up housing
prices. No doubt their consumer spending helps to stimulate the
local economy, but at this income most gringos don’t really buy much,
even as they tend to patronize gringo-owned establishments. As a
result, they mainly help a few Tico bartenders and cashiers keep
their jobs while gringos profit from other gringos. Meanwhile, many
gringos, especially the single men, spend a good deal of their
discretionary funds on prostitutes, and a few buy drugs. The money
paid to prostitutes is not taxed, yet the prostitutes enroll their kids in school, visit the health clinics, and receive police and fire protection like everyone else. They are also enticed away from stable marriages, with all the changes in family structure that go with that, and even enticed into the country. About 40% of the prostitutes catering to gringos aren’t Ticas, and the demand for the illegal prostitutes just burdens immigration more. Of course, the
gringos who buy drugs just fuel that problem.

True, some gringos help the society in other ways—again by tutoring children and the like. Money isn’t
the only way to be an asset to Costa Rica.

However, I don’t know about you, but I haven’t met many of these socially contributing gringos. Instead I see lots of old goats sitting on barstools and consorting with the
whores while badmouthing the country. Few speak Spanish, and just as few have even bothered to enroll in a class. It amazes me that a
gringo can live in Costa Rica for 30 years (one case I know) and
never have bothered to take a single Spanish class despite having
done absolutely nothing except drink, watch TV, and consort with
whores. Of course, this gringo believes that the Ticos are lazy and
dishonest. He, simple because he was born in the US, is of superior
character, at least in his own opinion. How the hell can anyone
believe that gringos like this contribute to Costa Rica?

Anyway, you make a strong case for
wealthy gringos contributing to the society (whether they intend to
or not) and Costa Rica may be losing out to countries like Panama by failing to provide these gringos with commensurate tax incentives.
However, I don’t think this same case can be made for the vast
majority of gringos in Costa Rica, and this was my point. The notion
that these folks contribute to the society merely because they burn
through a couple grand a month on a protracted party is ridiculous.
The numbers don’t even add up, and this is before we estimate their
non-financial cost to the society.

You do say “for visits,” so I guess mean to highlight tourism, and the economic impact of tourism may be different than is the impact of the expats.

But I’m not sure that the economic impact of tourism is all that great. Yes, tourism pumps money into the economy and provides lots of jobs, but a some good part of the money is just swapped around among the foreigners and the jobs Ticos get are pretty lousy.

In the extreme, think of the tourists who come and stay at the Hotel Del Rey or any of many similar establishments. These hotels are gringo owned, so any profits just go from one gringo to another. Ticos get hired as doormen, wait staff, sometimes a part-time tour guide, and very infrequently as manager. Meanwhile, although some Tica prostitutes earn trick fees (if you think that’s economically beneficial), about half the hookers aren’t even Ticas. Yes, the tourists pay a hotel and sales tax, but I doubt it’s enough to cover the costs of the public services like police and fire protection. I just don’t get how tourism is the goose that laid the golden egg.

Worse, we don’t know what would have developed had tourism not taken root. There are several blocks in “Gringo Gulch” and more or less all of Jacó and Tamarindo that can’t be developed in any other way because they’re already developed for tourism. Every other business is priced out by the foreigners’ money.

With respect to expats, I really don’t see what they contribute. Yes, some build retirement houses or buy condos, while others pay rent, but doesn’t this have the effect of driving up real estate prices for Ticos? Of course it does. Look at Jacó and Tamarindo. In the main, the Ticos who work in the service businesses that cater to the foreigners can’t afford to live in the towns.

One gringo developer even included distant humble housing for those he called his “worker bees.” That’s what Ticos are in their own country in the eyes of some gringos.

And contrary to some opinion, the expats don’t even pay much tax. Yes, they pay the sales tax, like everyone else, and if they bother with legal residency, they pay the healthcare portion of the Caja tax. But they don’t pay income taxes, the way Ticos at comparable incomes have to pay, the sales tax isn’t much, and the Caja tax is actually too low. Old expats can tally up some serious healthcare costs that others, including Tico taxpayers subsidize.

I understand the theory of the multiplier effect, namely that every dollar injected into the economy gets swapped around multiple times and therefore helps several people. I also understand that when an economy has next to nothing, as was the case with Costa Rica when it initially set out the welcome mat for tourists and expats, a country has to do something fast to attract any money at all.

But it seems to me that tourism and expats have outlived their usefulness, and even become part of the problem. Heck, Costa Rica has a cabinet-level Ministry of Tourism (that successfully resisted being demoted to sub-cabinet level) staffed with bureaucrats drinking at the public trough to promote, of course, their own jobs. It also has tourist cops, who want to protect their jobs too, and all kinds of finance people as well as lawy firms that make big bucks off the industry.

In short, there are a lot of vested interests promoting this, and I for one don’t believe their numbers. They exaggerate the economic benefits and ignore the costs, not because it’s best for the country but because it’s for them.

I’d like to see a serious and thoughtful analysis of US citizens’ contribution to the economy. Mind, I suspect that there is some, but I’m pretty sure it is a lot less than the myth and probably only beneficial to a few niche markets.

Basically, when I see a gringo with maybe $2000 a month pension income sitting on a barstool and whistling at the Nica whores while paying rent to another gringo, I am hard-pressed to conclude that this guy is much of an asset to Costa Rica’s economy–or hell, it’s culture.

No, the jackboots haven’t visited, and while I do try to take care lest I defame anyone (big trouble in Costa Rica), I don’t fear reprisal.

I’m also quite willing to be critical of Ticos, I believe.

What annoys me on discussion boards like these is the attitude expressed by some that gringos are automatically smarter and better than Ticos, and therefore the mere presence of gringos in the country is a blessing to Costa Rica. I don’t mind fact-based criticisms of whatever, but it doesn’t seem right to me to call Ticos idiots.

I guess, as they say, some of my best friends are Ticos.

BTW, I seriously doubt you’re a dummy.