Argentina weighs in on the rich to pay for COVID measures – Dateway

In a year of prolonged shutdowns and widespread financial fallout, both chambers of the National Congress voted in favor of a one-time levy on 11,865 Argentines whose individual assets total at least 200 million pesos (2 million pesos). euros / $ 2.4 million) to help finance the fight against the novel coronavirus.

As part of the Aporte Solidario y Extraordinario (Extraordinary Solidarity Contribution), a progressive wealth tax would be imposed – starting at 2% on national assets from 200 million pesos to 299 million and reaching a maximum of 3.5 % on assets exceeding 3 billion pesos, and ranging from 3% to 5.25% on assets abroad.

The idea is to help small businesses and less wealthy Argentines, who are suffering the financial fallout disproportionately, as well as to purchase the necessary medical supplies.

“Only 0.02% of the population will pay this contribution,” Carlos Caserio, chairman of the Senate Budget Committee, said on December 4. “Make no mistake: we are not persecuting the rich.” He said the government was simply seeking a contribution from the wealthiest Argentines so that the country could survive the pandemic and recover from the financial impact.

But Martin Lousteau, a senator from the opposition Radical Civic Union (UCR) sees the measure differently. “We live in a country with record tax rates,” he said during the debate, “and yet we have record poverty.” He wrote on Twitter: “Instead of creating new taxes, couldn’t we learn to manage better?”

Cesar Litvin, an accountant and CEO of a financial consulting firm that teaches taxes at universities, had a similar point of view. “I have no doubt that the country needs more tax revenue to deal with the damage from the coronavirus pandemic, but, on the other hand, I am sure that the wealth tax will have effects contrary to those expected. “he wrote in an email.

“The fiscal pressure in Argentina has reached unbearable levels, and most of the taxpaying population is tired of being the only one carrying on its back the weight of an obese state in the face of increasingly public spending. high. “

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Litvin was referring less to the 35% maximum of income tax (compared to a maximum of 45% in Germany) than to various “national, provincial and municipal taxes”, as well as an existing tax on assets.

“Health and economy”

Christian Ambrosius, German development economist and visiting professor at the National Autonomous University of Mexico, said it was not really productive to stress the need to rationalize public spending in an acute situation rather than discussing a single tax. He said the money was needed now.

Argentina was going through a deep financial crisis even before the pandemic hit. The country has massive debt and narrowly escaped insolvency for the third time since 2001 in August.

“The coronavirus has landed in a country which has very difficult access to the international capital market and which cannot afford more debt,” Ambrosius said. Given the limited options, he said, a levy on the megarich makes sense.

“I think this has to be seen from a social equity perspective,” Ambrosius said. “In Latin America, the crisis has hit the poorest populations much more because they are less able to protect themselves in terms of both health and the economy.”

The 20 million Argentines who live below the poverty line represent 44.2% of the population, which, according to Clarin, the largest daily in the country, is the highest proportion in 10 years. But, Litvin said, just over 50% of Argentines who live above the poverty line might disagree with the wealth tax proposal.

“Those who bear the tax burden and in particular those who will be affected by the levy are totally against it,” he said. He added that he believes the measure is unconstitutional and predicted that many would appeal to the courts. In addition, he said, the tax could lead to lower investment, higher unemployment and lower revenue from ordinary taxes.

Ambrosius disagreed with this. “It’s almost a standard knee-jerk argument that always comes up when a progressive tax is filed,” he said. “But this is a levy on private assets – not on commercial activity.” He said the fear that investments would suffer as a result of the tax was overblown.

The pathetic radical left attacks us with a signal and a superficial shame of virtue.

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