Taxes are always a very complex matter in modern society. Argentina will exert an interesting option in this particular regard. A new mandatory wealthy ax will be introduced to help out the poor and needy.
A key Precedent in Argentina
In theory, everyone should pay equal taxes in a country. Whether one has a regular wage, or makes millions of dollars, the tax ‘scale” is – on paper – the same for everyone. In the real world, however, there is a clear gap between regular employees, wealthy individuals, and corporations. This is one of the reasons for the ongoing financial inequality around the globe.
Especially during times of COVID-19, taxes are the last thing people want to pay. In Argentina, a new proposal has been put forward that can create a global precedent. Redistributing wealth in the country will be nigh impossible, but some concerns can be alleviated.
A new bill has been approved by the Congress to raise $3.75 billion through a wealth tax. As a result, the ultra rich in the country will have to part ways with some of their fortune. All of the collected taxes will be used to finance programs for those who can’t make ends meet due to COVID-19. A very interesting option to explore, albeit one that will be met with skepticism first and foremost.
Anyone in Argentina with a net worth of over $2.5 million will pay this tax. At the time of writing,there are over 10,000 individuals in the country with such a high net worth. The tax fee is 2% of their entire net worth, which has to be paid this one time. However, as one’s equity increases, the tax percentage may turn out to be higher.
Even though Congress approved the bill, it still has to pass the Senate. That seems rather unlikely, though, as there isn’t much support for the bill as of right now. Not entirely surprising, as those who have wealth in Argentina often seek out political allies opposing proposals affecting the wealthy in a negative manner.
Dividing the Collected Funds
As things stand, the plan of action seeks to distribute the collected taxes for different purposes. Twenty percent will be used for medical supplies for the COVID-19 situation. A similar percentage is used to help SMEs who are currently struggling. Fifteen percent is used for social development, and 25% goes to developmental ventures for natural gas. The remainder of the money is used for student scholarships throughout the country.
Introducing yet another tax in Argentina will be a very tough ordeal. The country faces many financial problems. While one has to applaud the option of taxing the rich – which should always be the norm – those individuals will find ways to evade this approach. Hiding money is still far too easy in this modern day and age.
It is worth noting the concept of a wealth tax is not unique. Several countries have already introduced similar concepts, primarily in Europe. This includes regions such as Spain, Switzerland, and Italy. Making this a global approach will not happen anytime soon, though. The “elite” is too well-protected by politicians to make that happen.
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