Argentina's Millionaire-Targeting Tax Hike Other Countries Don’t Have The Balls To Copy


Argentina's Millionaire-Targeting Tax Hike Other Countries Don’t Have The Balls To Copy

Tango dancing in the streets of Buenos Aires, Argentina's capital. Image: Getty

We’re pretty lucky here in Australia when it comes to The Bat Kiss. Indeed, Oceania as a whole has done pretty well during this pandemic – New Zealand has virtually conquered the virus, and many countries have yet to even report a case, including Palau, Micronesia and Tonga.

Other regions of the world haven’t been so lucky. Europe is suffering, with countries like France, Italy and the UK dealing with millions of cases. China might have done a remarkable job combating COVID-19 but other Asian countries haven’t been so successful, such as India and Indonesia (although considering their huge populations, it’s surprising they aren’t doing worse).

But the Americas have easily had it worst. The United States has the dubious distinction of leading the world in case numbers, with almost 15 million cases – with Brazil taking the #3 spot with almost 6.7 million. Many observers put this down to their COVID-sceptic presidents, Donald Trump and Jair Bolsonaro, who have actively discouraged mask usage and downplayed the extent of the virus.

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But the US is a rich country. Brazil isn’t, nor are other hard-hit Latin American countries such as Argentina, Colombia or Peru. The US might have more cases, but the death toll in Latin America is proportionally much higher than it is in the US, or in other Western countries. Respected medical journal The Lancet has described the situation as a “humanitarian crisis”.

In light of this, the Argentinian government has passed a radical new tax, designed to help clamp down on the virus – one that we can’t imagine the US, Australia or other Western countries having the balls to introduce.

Centre-left President Alberto Fernandez’s government has passed a new tax on Argentina’s wealthiest people to pay for medical supplies and relief measures. The one-off levy, dubbed the “millionaire’s tax”, will see those with assets worth more than 200 million Argentine pesos (3.2 million AUD or 2.5 million USD) – around 12,000 people – hit with an extra progressive rate of up to 3.5% on wealth in Argentina and up to 5.25% on that outside the country, BBC World News reports.

The Buenos Aires Stock Exchange earlier this year. Stock exchanges across Latin America have experienced huge losses thanks to the COVID-19 crisis. Image: AFP/Ronaldo Schemidt

It’s a bold move, one that Argentina desperately needs. The country is currently the ninth-worst affected country by COVID-19 in the world, with almost 1.7 million active cases. Argentina was already in the midst of a recession before the pandemic, which has only made things worse, the country potentially facing its ninth sovereign debt default in history, The Economist predicts.

Wealth disparity is already a huge issue in Latin America, so a proactive tax measure like this makes a lot of sense. A majority of Argentines support the new millionaire’s tax, with huge crowds of demonstrators having amassed outside Buenos Aires’ National Assembly building in support of the measure as it was debated in November. Not everyone is a fan, however: opposition groups fear it will discourage foreign investors, and that it will not be a one-off tax.

Regardless of what you think about the tax, it’s certainly a radical measure – and not one you’d easily envisage other countries attempting. Could you imagine the Republicans in the US or the Conservative Party in the UK being happy with something like this?

The ball’s in your court, ScoMo.

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