Learning from Costa Rica

I am writing from the four seasons resort in Costa Rica. The country is full of lush rainforest, and has a growing economy. I have been impressed generally by everything that I have seen so far. My only complaint about my trip would be that it is the very definition of touristy, but they are certainly putting their best for forward, and the scenery is absolutely amazing. What I might have been most impressed by is the comment my tour guide made, which suddenly caught my attention…

“Costa Rica has had no soldiers for 71 years.”

According to the guide, Only one time since the congress voted to disband the army did a foreign nation attempt to invade, and it got off mostly fine. As someone who believes the U.S. has a much bloated military force, who has also realized how easy it is for armies to be used for political gain, and knows how much money a military costs, this idea was actually exciting to me, so I took to doing some more research on the nation.

The first thing I found was that the top income tax rate is 25%, still bad, but not nearly as bad as the United States where the top rate is 37%. Most of Costa Rica also has only a one time transfer property tax rather than a monthly recurring property tax. Costa Rica could be characterized as a low-tax burden nation with the exception of it’s 30% corporate income tax rate, nine percent higher than the current U.S. corporate income tax rate. An additional tax, not always recognized in the U.S. is the insane amount of Debt. Costa Rica has a relatively stable debt to gdp ratio at 69.60% compared to the United States 105.40%. Overall the tax burden is similar, because Costa Rica has chosen to invest more in welfare, education, etc.

Another thing to consider is the ability of elected officials to use a military for political gain. To me it makes sense, particularly for a small nation like Costa Rica to have disbanded the army. Not only can a military be used to fight unjustifiable wars for the sake of political gain. It can also be used to suppress the voice of the people, like has been the case in nearby countries such as Venezuela and Nicaragua. Recently videos were released of army tanks running over protesters against Venezuelas illegitimate government, and in the country to the north- Nicaragua- Over 300 protesters have been killed.

On top of a large military force being difficult to maintain, it can often be used at the whim of an officeholder, in a system without proper checks and balances. Large militaries can easily oppress both foreign and native civilians. We might consider learning a few lessons from Costa Rica, one of the strongest democracies of the third world.


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