Chile looks to tax the super-rich

Marcelo Montecinos/The Santiago Times Staff

SANTIAGO – The Communist Party of Chile began a constitutional reform project on June 2 which would institute a one-time 2.5% tax on the assets and income of the super-rich. The additional funds would go towards alleviating the government costs associated with the Covid-19 pandemic.

The president of the Production and Commerce Federation, Juan Sutil, was quick in saying that this would be a mistake.

“It’s not that I am against raising taxes nor changing things, but…all of the one-time taxes that have been applied in the last few years in Chile, have become permanent, all of them,” he told Radio Cooperativa.

And he is correct. A one-time tax was imposed in 1986, for example, that went towards re-building Chile’s infrastructure after the devastating 1985 earthquake; the tax is still in place today, 14 years later.

The new taxes would bring in up to $2.2 million dollars into government coffers which would go towards pacifying Chileans that took to the streets in protests demanding a higher minimum wage, higher pensions and a better health and educational system.

Chile’s pension system is changing for the worse

The tax would increase for those that make more than $18,900 a month and have assets, or housing, worth more than $500,000. The reform would also increase taxes on large companies to 27% while lowering taxes for pensioners.

The reform was passed by the House of Representatives on May 26 and is currently awaiting to be signed into law by President Sebastian Piñera.

Chile announces new form of testing as COVID-19 cases rise above 122,000