Argentina is going through a real fiscal tragedy that the system and politics constantly try to hide or obscure through myths or falsehoods, which it is essential to deny for the sake of an aware citizenship. In this sense, one of the main arguments used to raise taxes is a redistribution of resources from the richest sectors to those that have the least. Unfortunately, it is one more way to cover huge and inefficient public spending.
Why? simply because, uncontrolled public spending is paid for in a gondola. Along with taxes and inflation, spending completes the “fiscal tripod”, i.e. the three inseparable variables that determine what we spend on and how we finance ourselves. This doesn’t just affect the wealthy, but 47 million Argentines. Also Those who have to use their little income to buy basic necessities do more harm, how is the food. Such is the government spending surplus that we need the sum of the world’s highest taxes and the world’s fourth-highest inflation.
It is worth reflecting on what our tax system has become when it requires the more than 17 million impoverished Argentines to buy a packet of milk from the state when it is difficult for them to buy it themselves. Or that to buy a cell phone, which is an essential work tool for low-income people, they have to pay another two to the treasury. Therein lies the fiscal tragedy.
These arguments can be contradicted by pointing out that there are progressive taxes that seek a more equitable distribution, but what should not be forgotten is that we are in the most burdensome country in the world. The World Bank’s “Doing Business” total tax burden ranking, currently being reissued, records that in Argentina, for 17 years, the tax burden has exceeded 100%; and we also have economic and fiscal studies from the UIA which, in two other respects, confirm this statement. It means, more precisely, that In the testimonial case of an SME company, its profits are not sufficient to cover taxes, also compromising its capital. This does not happen, not even remotely, in other countries of the world.
This can only have two consequences. First, high escapism. There is de facto tolerance from the tax authorities, especially in the SME sector, because they know it collect all taxes, most companies would go bankrupt. The State itself recognizes it with the sad record of sanctioning an amnesty, moratorium or salary plan every 2 years and 9 months, which allows regularization with a substantial reduction compared to those who complied. Which of course, through injustice, affects tax compliance.
In second place, moving on to the highest tax prices in the world. This occurs in those cases of companies that have high levels of tax compliance, either as a result of an internal political decision and/or because, in the case of large taxpayers, they have the tax authorities sitting in their offices. In this way, the excessive tax burden has the consequence that a substantial share of the final price of consumer goods is made up of taxes (generally higher than 40% and, in some cases, even more).
We must not forget that there is a way out of the fiscal labyrinth, which is not through Ezeiza or through the Río de la Plata, and which depends on us citizens, on the awareness that we can deal with what the Argentine legal system hides from us. from there to be able to claim a transformation. For this reason, when politics indicates that the street carries a higher tax burden, even if with a progressive attitude because whoever has more pays more, we must never ignore that it is a justification for supporting the squandering of public funds and this suffocating pressure, apparently only on the richest sectors, ends up having negative consequences on the entire population. Because one of two things: either those taxes are transferred to the shelves or, if this is not possible, the one that ends up being transferred (or closed) is the company itself (and its employer), with the effects that this it has on the labor market and the economy in general.
Nor should it be forgotten that success stories abound throughout the world, and that countries such as Ireland or New Zealand or, closer in time and geography, Brazil, have promoted tax reforms with lower taxes that have not only eased the burden on the productive apparatus and on people, but have also promoted an increase in tax collectionas the famous Laffer curve clearly shows.
This balance in the tax burden is possible and it can only go hand in hand with logical expenses and taxes. This is the mission we have at Lógica: to help citizens become aware that it is possible and that, although the system hides it, we are facing an obstacle to the development of the country which can only be overcome with the commitment of all and ability to identify how this fiscal tripod harms us in daily life.
He inefficient public spending leads yes or yes to unsustainable taxes, and in this there are no ideologies. For years, Argentina has overtaken governments of different leanings such as Chile and Paraguay (less than 40%), communist ones like China (59%) or populist ones like Venezuela (73%) in that tax burden classification, and also the different Political cues that have guided the destinies of the nation have continued a fiscal policy that does not stand up to scrutiny.
We still have time and it depends on us. Let’s become aware of this problem, how the system hides it from us and how it damages us, let’s help each other and We ask politics for the transformation that our country needs develop with all the resources and all the potential it has. From Lógica, a supra-party entity, we are working towards it.
Source: Clarin
