translated from Spanish: Argentina: controversial project that taxes large fortunes to alleviate social crisis

Argentine officialism obtained the approval in the Chamber of Deputies of a project that contemplates the application of a levy on large fortunes to alleviate the crisis generated by the Covid-19 pandemic, which is considered confiscatory and illegal by business sectors. President Alberto Fernández stated that wednesday’s early morning initiative “is not a punishment for the rich” and should be “a starting point for a more supportive Argentina.” The text will be dealt with in the Senate, controlled by officialism.” The pandemic forced a great multiplier of state investment to help sectors of society in this difficult situation,” Fernandez told the media. The president admitted the need to “minimize as much as we can” the fiscal deficit generated by that state effort. The legislative text promoted by Máximo Kirchner, head of the Front of All bloc and son of vice president and former member Cristina Fernández de Kirchner (2007-2015), has blistered entrepreneurs, who argue that it discourages investment and undermines production. The Business Convergence Forum questioned that when private investment needs to be promoted to restore economic activity, a project that will generate a “reverse effect” will be promoted. Its treatment came at a time when an International Monetary Fund mission is in Buenos Aires to negotiate with the government to refinance a debt of about $44 billion incurred by the country in 2018, during a devaluation crisis, which would entail requiring the Executive to carry out several reforms and reduce spending. Analysts noted that the new levy will help reduce next year’s primary deficit. According to officialism, potential revenue would account for about 307 billion pesos (about $3.6 billion), about one percentage point of GDP. Leftist opponents who abstained in the vote felt that what is raised with this levy would serve to cover some of the adjustment the IMF will ask the government to make. The initiative creates a contribution for those with assets over 200 million pesos (about $2.5 million), with an aliquot 2% to 3.5% for goods at home and 3% to 5.25% for goods abroad. The debate divided the officers, who argued that this is a contribution made for the one time by the people with the greatest heritage, and to much of the opponents of Juntos por el Cambio – which he has among his references to former President Mauricio Macri (2015-2019) – who criticized that it is a double taxation because there is already a tax on personal property and will bring claims to justice for its alleged unconstitutionality. Officer Carlos Heller said he has a “solidarity sense because we are facing an emergency situation.” The pandemic aggravated argentina’s crisis for more than two years, smothered small and medium-sized enterprises, increased unemployment, and triggered poverty, affecting more than 40% of the population. Less than 10,000 people – according to critics would be more – equivalent to 0.8% of the total taxpayers who filed an affidavit on personal property in 2019.Those with foreign assets would pay a higher aliquot, but if they agree to repatriate at least 30% of those holdings, they will be exempt from the spread. Opponent Luciano Laspina questioned the application of a new levy in a country “with the second highest business tax burden in the world” that dozens of companies are leaving, with “12% product drop”. Other opponents called the project “populist taxism” and reported that it has technical flaws that make it unconstitutional. According to the government, this will be used, inter alia, for the purchase and development of critical equipment and supplies for the health emergency and for aid to small and medium-sized enterprises and the most deprived neighbourhoods.

Original source in Spanish