A Tax Against The Poor

DIARIO ARGENTINO – INFOBAE – The tax on large fortunes seeks justification that the rich have to make a greater effort in this emergency and, in fact, its official name is “Solidarity and extraordinary contribution to help mitigate the effects of the pandemic” .

The reality is that, thanks to our politicians’ vocation to overspend, Argentina is going from emergency to emergency and from crisis to crisis. And all of them generate the need for resources of a spending State that seeks resources by increasing existing taxes or creating new ones. This is the case of the “Solidarity” taxes with which the current government began its administration and which already included an increase in taxes on “Personal Assets”. In short, the project taxes the wealth of the middle class or rich in Argentina.

It has been installed in Argentina that it is recessive to adjust public spending. It is still comical to think that way, since in order not to reduce the expenses of the State (which spends more) it adjusts to the productive sector with more “Solidarity” taxes as in the last time. That is to say that reducing with taxes the one that generates the resources to pay the expenses and salaries of the State plus those of the public sector is not recessive!

In fact, if one looks at the history of the growth of the State in Argentina, it is observed that politicians spend more, forcing to increase the tax pressure on the private sector, which reduces the generation of jobs. Generous officials supply the missing with jobs in the State or give them plans, and in order to pay them, they increase taxes, damaging those who produce, lowering their chances of creating productive jobs, in an endless vicious circle. That is why there is a continuous increase in a State that is enlarging with respect to the private sector (in frank decline), stumbling from crisis to crisis. It is no coincidence that we have reached the absurdity that 8,000,000 Argentines “bank” more than 21,000,000 checks that leave the State. Something that does not happen in any country that progresses.

Argentines work 214 days for the State

Argentina has the incredible number of more than 165 national, provincial or municipal taxes, which threaten to continue increasing this year. On the other hand, Argentines work an average of 214 days for the State and, in fact, it has only been since August 3 that most of them have begun to work for themselves and their family.

There is still a minority of martyrs who continue to bear the burden of paying taxes. The country is in position 21, out of 190, among those that squeeze the most with taxes from their companies. Furthermore, according to a World Bank report we are among the few in which an SME with a good return on income would go bankrupt if it pays all the taxes. Nothing strange that there is such a level of evasion, it is a question of survival. Despite all this, our governments continue to increase or create new taxes while they wait for Argentines and foreigners to put their money to produce in Argentina, with 178 other countries in the world offering to treat them better. An absurd dream.

It is no coincidence that according to some estimates, Argentines are in second place among those with the most capital flight per inhabitant. It is the only way to protect our assets from the voracity of our governments, which is not limited to the enormous tax pressure, but adds: a) to force compliance with more than 67,000 regulations, which are increasing every day, and which seek to tell workers and employers how they should do things; b) set prices for those who produce, generating loss of profits; and c) they dominate the Justice, making it very difficult to defend their own rights against the attacks of governments or their allies, for example the unions.

So we are not only talking about the creation of a “solidarity” tax on the rich (in addition, calling something compulsive “solidarity” shows the demagoguery and hypocrisy of our political leadership). What we are analyzing is a new sign that the ruling class “has no cure” and that investing in this country means being condemned to being squeezed more and more with tributes. For an official who never managed a kiosk to tell you how to run your business, to order you at what prices to sell or what supplies to buy, how you are going to organize your employees, etc., seems like a joke.

Personal risk

When you start a company, you do so knowing that you are risking your work and capital by betting on your nose to find a good deal, on your ability to handle it and on the ups and downs of the economic context. In Argentina, you have to add that, although everything else goes well, an official can force you to lose money. I don’t think there are many who want to invest so that the government can run the business or squeeze it out. How do we expect productive jobs to be created to provide opportunities for advancement to the millions of Argentines who have fallen into poverty?

If until now there was someone left without understanding why this is a country in decline, I hope it is clear to them that it is because no one dared to correct this course of increasing tax abuses, statism and interventionism that led us to less and less Argentines and foreigners invest in the country.