One of the law’s authors said it would only affect about 0.8% of taxpayers. Those affected will pay a progressive rate of up to 3.5% on wealth in Argentina and up to 5.25% on that outside the country.
AFP news agency reports that of the money raised, 20% will go to medical supplies, 20% to relief for small and medium-sized businesses, 20% to scholarships for students, 15% to social developments, and the remaining 25% to natural gas ventures.
They aren’t even pretending that this is for the Rona. Only 40% is going to something that could reasonably be claimed to be related to the virus. And if you think this will be a one time tax, I have a bridge to sell you. Once the tyrants find a new well of money, they will keep going back to it.
What the leftists in Argentina don’t understand (just like the leftists in America) is that people – particularly wealthy people – will react. They will hide their money, shift it overseas, move their businesses overseas, bury their money in the yard… whatever. They will find ways to avoid the tax. And in doing so, the government will not collect as much money as they thought and they will force all sorts of negative economic aftershocks and fuel illegal trade. And how will the little tyrants react? By onerous enforcement and extending the tax to more people. Then there will be more unrest and instability. This cycle has happened a thousand times.
Geez. Putting this story out there will give Tin-Pot Tony Evers and/or The Boss, Maggie Gau, ideas.
Owen,
I just finished reading Capital and Ideology by Thomas Piketty. He makes the point that European countries and the United States had a steeply progressive income tax and wealth tax (inheritance) that was imposed during the early 20th century until the 1980’s. He points out that progressive tax rates funded economic programs that created a period of immense growth. In contrast, the Thatcher/Reagan tax cuts of the 80’s failed to create economic prosperity.
Picketty thinks it is possible and desirable to tax wealth. He discusses the problems with capital flight, but makes a strong argument that these problems can be overcome. For example, Picketty points to the success of the French wealth tax (ISF); receipts which have more than quadrupled between 1980-2018.
These facts would seem to directly contradict your claims. Do you have any specific examples to support your assertion that their is a cycle of increasingly onerous tax regulations that causes failing revenues?
Max,
Sound like you have been reading ridiculous communist propaganda.
No period of growth has been better for humanity than the 1980s to present.
Its not even close.
Either Maxwell or Picketty obviously were nor alive just before and after the Reagan admin.
If you call two major wars “economic programs” then you’re correct. Mr. Piketty confuses cause. By the way, how does he account for the Great Depression? Was that “immense growth” too?
I would include that a significant amount of the time of heavy US corp taxation was during the cold war where large corps couldn’t go multi-national and build factories in 3rd, 4th or 5th world countries, because that country immediately became a target of the USSR. So the fear of factories being nationalized deterred corps from leaving the country. The rise of multi-nationals coincided with the fall of the USSR.
I also note that in reading about it just now, France killed their wealth tax in 2017, because too many wealthy French citizens were changing country residences. So if France’s wealth tax was Piketty’s primary positive model, he may need to rethink it a bit.
Piketty gets lots of admiration from the Usual Suspects, but Heritage’s review of his 2014 volume is not friendly. Here’s part of one graf:
Well, you can’t win ’em all, eh? Tax the bejabbers out of capital, see wages take a massive dump.
https://www.heritage.org/report/understanding-thomas-piketty-and-his-critics