Great analysis and comment. Came to say that property tax (like any flat tax) is regressive, in that there should at least be a homestead exemption or value floor. Property tax on investment properties makes more sense.
VAT wouldn't be so regressive if canasta basica goods (not just bread/milk) were exempt.
It's amazing to me that income tax doesn't really exist down here. When I brought it up in conversation down here I got a earful about wages from labor isn't ganancia (i.e. capital gains). But a graduating income tax like the US probably wouldn't rock so many boats (until inflation moves the goal posts).
There is also bienes personales, a personal property tax that is applicable on top of municipal real estate tax like ABL.
This tax is levied on your total assets and equities including real estate, cars, shares, household furniture, cash ...everything you own. Although the thresholds to have the liability to pay this tax are very low, only about 2% of Argentines pay it (just shy of 1.000.000 people). Hint: If you're an Argentine tax resident and own a house worth more than $136k or have total assets worth more than $27k, you are liable to pay it. (For 2023, you are/ were liable to pay it if you have assets worth more than $13k...).
Also personal income tax
is paid by over
800.000 more workers since the non-taxable threshold was reduced this year. It is deducted at source as in most countries with payroll / PAYE tax systems. It is also automatically withheld from local dividend payments etc.
Income taxes here are gradual, like in the US, although after about $7000 you'll be paying the highest rate of 35% and there are not so many deductions possible as in the US.
Argentina's
personal tax system, on the surface, is very similar to that of European countries like Spain consisting of: Income tax, social contributions, VAT (also at 21%), wealth tax (bienes personales) and municipal real estate tax.
The problem in Argentina is taxation on the productive sector. As posted earlier it is one of the few countries in the world that tax exports. It is also one of the few countries in the world that tax
gross business income (regardless if you're operating at a loss...) plus a myriad of other activity specific taxes that all add up and cannot be offset against other taxes already paid meaning that businesses in Argentina ultimately have a very high and complex tax burden meaning for many people with money it is simply easier and more lucrative to invest it somewhere other than Argentina, or to be less productive than they may otherwise like to be since the bigger you are, the easier you are to identify and thus tax (Explaining why more than half of the economy and workers in Argentina is
en-negro, generating a huge amount of unsustainable fiscal and social problems).
Just imagine what Argentina would look like if everyone, rich and poor, paid the full amount of taxes they are liable for that finance the services and subsidies they want to consume, as in other developed countries like European countries with a similar tax model. Perhaps the country would be able to finally live within its desired means.... but instead it is left with the only option cutting its expenditures to match its income after maxing out its credit limit. Once there is a fiscal balance from cutting expenditure OR a high level tax compliance generating higher revenues (whatever comes first...) putting out the day-to-day fire of public finances, serious discussions about tax reforms can start.
