INEQUALITY AND OIL SUBSIDY IN INDONESIA

This paper is intended to give some alternative positive suggestion on how to cope with the must of the cutting off the oil subsidy domestically. The problem that faced by the government is that the compensation fund will hardly enjoyed by the poor, and moreover it is hard to watch out the whole process. The other conditions that faced by the government is the economical inequality that shall be overcome to prepare the world market era. This paper suggests on making such a preparation by the rising up the progressive tax on luxurious goods indirectly. This will make the culture that decreasing the consumption on luxurious goods for the rich, and higher the economical equality for the poor. This will be far from spoiling the poor (as by the coupon distribution for the poor), and even more balancing the government revenue for the sake of economical resurrection in Indonesia.