8 ms·

Do taxes only exist in Argentina? Are you advocating tax evasion here?

Izikiel43 5y ago
In Argentina, tax evasion is a way of living, everyone there, young or old, rich or poor, looks for a way to avoid taxes, since taxes coupled with inflation make life very expensive, no matter your income ¯\_(ツ)_/¯ . The best way to live in Argentina is to be a ghost. No bank accounts, nothing declared, everything you own should be on someone else's name, earning usd in a foreign account and you should live on cash (converting usd to pesos as needed).
- wbsss4412 5y ago
  Tax evasion is likely what’s causing the inflation. Not saying I don’t get why an individual does it, but without the ability to reliably collect taxes, there’s no way to stop rampant fiscal deficits.
  - Izikiel43 5y ago
    No, spending more than you earn like there is no tomorrow for 20 years has caused inflation
    - wbsss4412 5y ago
      The US has been running deficits for decades and doesn’t face the same level of persistent inflation as Argentina.
      - QuarterReptile 5y ago
        There is no way to succinctly describe all the myriad differences between the two countries that make this comparison unhelpful for understanding Argentinian inflation.
        wbsss4412 5y ago
        Indeed I am using a shorthand her to summarize the issues as well. My response is meant to highlight the fact that the situation is not nearly as “simple” as a government that runs fiscal deficits. I don’t know every detail about Argentina, but broad strokes, when you have a failing political class that is unable to effectively levy taxes and maintain international credit worthiness, you are going to have financial trouble. People love to blame spending and get moralistic about it but that’s typically not the primary issue.
        Izikiel43 5y ago
        Ehh, in this case it is, they are spending much more than we earn, and to cover that they used to take debt. Now no one lends to Argentina at a nice rate, so they emit internal debt by printing a ton of ARS to finance themselves, thus generating inflation. If they stop printing, they have to stop spending as well as cutting spending, leading to a raise in interest rates and a quick economic crash instead of the slow burn situation as of now. The current government is just trying to hold on until next elections, so when the economy explodes they can blame the next government for it.
        wbsss4412 5y ago
        It’s not that what you’ve written here is incorrect, but that this doesn’t say anything about what the remedy should be. Simply letting the economy crash isn’t a good solution as it doesn’t address the fundamental reforms that are needed and doesn’t get you any closer to solving the structural issues. All it does is create unnecessary pain for people. Again, if an entire society is engaging in rampant tax evasion, that is going to need to be addressed in order to turn things around.
        Izikiel43 5y ago
        The remedy are 10 years of austerity measures and free market reforms in order to start seeing the light at the end of the tunnel. This is also known as a political suicide.
      - Izikiel43 5y ago
        Because everyone in the world likes and uses USD. In Argentina no one wants Argentinian pesos, people outside argentina like them even less, however you can use USD all over the world, so yeah, it's not comparable.
        wbsss4412 5y ago
        What you’ve written is just a tautology. USD are valuable because USD are valuable. Pesos aren’t valuable because pesos aren’t valuable. It doesn’t demonstrate why that is the case.
        Izikiel43 5y ago
        > USD are valuable because USD are valuable. > Pesos aren’t valuable because pesos aren’t valuable. Welcome to fiat currencies, where a big incidence on the value of the currency is what people feel about it! Basically, it's offer and demand. The offer of pesos is huge vs the actual demand, so they lose value. That's also the reason for the inflation of the USD last year, the us government likes to print non stop.
        wbsss4412 5y ago
        The US prints money because it can, Argentina prints money because it has to. (The monetary course taken by the fed in 2020 has proven quite successful, we’re at full employment with only moderate inflation as a price, which will be addressed in coming year) The money printing is a symptom of deeper issues.
      - berns 5y ago
        That's something MMT gets right. Public deficits = net private savings. So as long as there are people willing to save in USD (and not only US residents, people all over the world save in USD, including Argentinians), you can have a persistent deficit. In case the 7% becomes persistent inflation, make sure you have a plan B, you don't want to lose reserve currency status.
        wbsss4412 5y ago
        MMT gets a lot of things right, most of its critics seem to simply have not actually studied it at all, or have been informed primarily by sensationalist contrary takes.
      - tagoregrtst 5y ago
        The dollar is the world reserve currency. The extra printed money is diluted over an economy more than four times as large. France (now the EU) does the same thing by forcing its ex-colonies to use the convertible franc. France’s inflation gets exported to Africa
      - deleted 5y ago
        [deleted]
  - maxilevi 5y ago
    Not really. Tax collection from the Argentine goverment grows higher than the inflation rate year by year. The problem is over spending.
    - wbsss4412 5y ago
      Tax revenue as a percentage of GDP has been stable or falling since roughly 2004 [0] [0] https://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS?locations=AR https://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS?locat...
      - maxilevi 5y ago
        That source does not show all the accounts (says in the details popup). If you use the information from the argentine tax collection agency statistics page [0] and divide that result by the GDP you get a wildly different result (e.g. 23% vs 10% for 2019 using the official data vs your source) [0] https://www.afip.gob.ar/institucional/estudios/ https://www.afip.gob.ar/institucional/estudios/ And either way, the data you show does not support your claim, they are not very correlated. You have a mostly flat tax collection rate on an economy with a yearly rising inflation rate since 2002.
        wbsss4412 5y ago
        It excludes fines and social security payments. Perhaps it’s the pension system in Argentina that is causing the whole deficit? I’m on mobile so it’s currently a big more challenging to do proper research.
        maxilevi 5y ago
        Looks like it is. This site from the economic ministry says the "Servicios Sociales" (social services), is around 72% of all expenses (with social security as the highest spender) [0] [0] https://www.economia.gob.ar/onp/presupuesto_ciudadano/seccion3.php#gasto https://www.economia.gob.ar/onp/presupuesto_ciudadano/seccio...
  - berns 5y ago
    But don't forget that no matter the amount of taxes collected, politicians will find a way to spend more, so there will always be a deficit and more money will always have to be printed and whoever wants to reduce the deficit will be accused of "tightening" (ajustar) the Argentine people. Argentina leads a ranking of world tax pressure: https://www.ambito.com/economia/impuestos/la-argentina-lidera-un-ranking-presion-impositiva-mundial-n5075046 https://www.ambito.com/economia/impuestos/la-argentina-lider...
    - wbsss4412 5y ago
      > But don't forget that no matter the amount of taxes collected, politicians will find a way to spend more That’s just not true, there are plenty of states that run surpluses. > Argentina leads a ranking of world tax pressure I didn’t say their tax policy was good, only that it’s difficult to address deficits when you can’t reliably collect taxes. It’s all related. The government doesn’t collect sufficient tax revenue => they raise taxes => people evade taxes => the government raises taxes more. Such backwards tax policy is a sign that those who can evade taxes are (usually mostly the elites, but to an extent everyone does it), and those who can’t are footing the whole bill.
- mywittyname 5y ago
  Can you pay for everyday items or rent in USD?
  - Izikiel43 5y ago
    No, cash in pesos, you exchange usd from time to time.
627467 5y ago
Is tax evasion worst than trading on unofficial channels? I guess it depends on the jurisdiction doesn't it?
- wbsss4412 5y ago
  I mean none of it is good, but at the end of the day there’s no alternative when trust in government has totally broken down.
sbierwagen 5y ago
It's a failed state. The taxes don't go to schoolteachers or whatever, they go into the offshore account of the local boss.
- wbsss4412 5y ago
  I am in agreement there.

In Argentina, tax evasion is a way of living, everyone there, young or old, rich or poor, looks for a way to avoid taxes, since taxes coupled with inflation make life very expensive, no matter your income ¯\_(ツ)_/¯ . The best way to live in Argentina is to be a ghost. No bank accounts, nothing declared, everything you own should be on someone else's name, earning usd in a foreign account and you should live on cash (converting usd to pesos as needed).

wbsss4412 5y ago
Tax evasion is likely what’s causing the inflation. Not saying I don’t get why an individual does it, but without the ability to reliably collect taxes, there’s no way to stop rampant fiscal deficits.
- Izikiel43 5y ago
  No, spending more than you earn like there is no tomorrow for 20 years has caused inflation
  - wbsss4412 5y ago
    The US has been running deficits for decades and doesn’t face the same level of persistent inflation as Argentina.
    - QuarterReptile 5y ago
      There is no way to succinctly describe all the myriad differences between the two countries that make this comparison unhelpful for understanding Argentinian inflation.
      - wbsss4412 5y ago
        Indeed I am using a shorthand her to summarize the issues as well. My response is meant to highlight the fact that the situation is not nearly as “simple” as a government that runs fiscal deficits. I don’t know every detail about Argentina, but broad strokes, when you have a failing political class that is unable to effectively levy taxes and maintain international credit worthiness, you are going to have financial trouble. People love to blame spending and get moralistic about it but that’s typically not the primary issue.
        Izikiel43 5y ago
        Ehh, in this case it is, they are spending much more than we earn, and to cover that they used to take debt. Now no one lends to Argentina at a nice rate, so they emit internal debt by printing a ton of ARS to finance themselves, thus generating inflation. If they stop printing, they have to stop spending as well as cutting spending, leading to a raise in interest rates and a quick economic crash instead of the slow burn situation as of now. The current government is just trying to hold on until next elections, so when the economy explodes they can blame the next government for it.
        wbsss4412 5y ago
        It’s not that what you’ve written here is incorrect, but that this doesn’t say anything about what the remedy should be. Simply letting the economy crash isn’t a good solution as it doesn’t address the fundamental reforms that are needed and doesn’t get you any closer to solving the structural issues. All it does is create unnecessary pain for people. Again, if an entire society is engaging in rampant tax evasion, that is going to need to be addressed in order to turn things around.
        Izikiel43 5y ago
        The remedy are 10 years of austerity measures and free market reforms in order to start seeing the light at the end of the tunnel. This is also known as a political suicide.
    - Izikiel43 5y ago
      Because everyone in the world likes and uses USD. In Argentina no one wants Argentinian pesos, people outside argentina like them even less, however you can use USD all over the world, so yeah, it's not comparable.
      - wbsss4412 5y ago
        What you’ve written is just a tautology. USD are valuable because USD are valuable. Pesos aren’t valuable because pesos aren’t valuable. It doesn’t demonstrate why that is the case.
        Izikiel43 5y ago
        > USD are valuable because USD are valuable. > Pesos aren’t valuable because pesos aren’t valuable. Welcome to fiat currencies, where a big incidence on the value of the currency is what people feel about it! Basically, it's offer and demand. The offer of pesos is huge vs the actual demand, so they lose value. That's also the reason for the inflation of the USD last year, the us government likes to print non stop.
        wbsss4412 5y ago
        The US prints money because it can, Argentina prints money because it has to. (The monetary course taken by the fed in 2020 has proven quite successful, we’re at full employment with only moderate inflation as a price, which will be addressed in coming year) The money printing is a symptom of deeper issues.
    - berns 5y ago
      That's something MMT gets right. Public deficits = net private savings. So as long as there are people willing to save in USD (and not only US residents, people all over the world save in USD, including Argentinians), you can have a persistent deficit. In case the 7% becomes persistent inflation, make sure you have a plan B, you don't want to lose reserve currency status.
      - wbsss4412 5y ago
        MMT gets a lot of things right, most of its critics seem to simply have not actually studied it at all, or have been informed primarily by sensationalist contrary takes.
    - tagoregrtst 5y ago
      The dollar is the world reserve currency. The extra printed money is diluted over an economy more than four times as large. France (now the EU) does the same thing by forcing its ex-colonies to use the convertible franc. France’s inflation gets exported to Africa
    - deleted 5y ago
      [deleted]
- maxilevi 5y ago
  Not really. Tax collection from the Argentine goverment grows higher than the inflation rate year by year. The problem is over spending.
  - wbsss4412 5y ago
    Tax revenue as a percentage of GDP has been stable or falling since roughly 2004 [0] [0] https://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS?locations=AR https://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS?locat...
    - maxilevi 5y ago
      That source does not show all the accounts (says in the details popup). If you use the information from the argentine tax collection agency statistics page [0] and divide that result by the GDP you get a wildly different result (e.g. 23% vs 10% for 2019 using the official data vs your source) [0] https://www.afip.gob.ar/institucional/estudios/ https://www.afip.gob.ar/institucional/estudios/ And either way, the data you show does not support your claim, they are not very correlated. You have a mostly flat tax collection rate on an economy with a yearly rising inflation rate since 2002.
      - wbsss4412 5y ago
        It excludes fines and social security payments. Perhaps it’s the pension system in Argentina that is causing the whole deficit? I’m on mobile so it’s currently a big more challenging to do proper research.
        maxilevi 5y ago
        Looks like it is. This site from the economic ministry says the "Servicios Sociales" (social services), is around 72% of all expenses (with social security as the highest spender) [0] [0] https://www.economia.gob.ar/onp/presupuesto_ciudadano/seccion3.php#gasto https://www.economia.gob.ar/onp/presupuesto_ciudadano/seccio...
- berns 5y ago
  But don't forget that no matter the amount of taxes collected, politicians will find a way to spend more, so there will always be a deficit and more money will always have to be printed and whoever wants to reduce the deficit will be accused of "tightening" (ajustar) the Argentine people. Argentina leads a ranking of world tax pressure: https://www.ambito.com/economia/impuestos/la-argentina-lidera-un-ranking-presion-impositiva-mundial-n5075046 https://www.ambito.com/economia/impuestos/la-argentina-lider...
  - wbsss4412 5y ago
    > But don't forget that no matter the amount of taxes collected, politicians will find a way to spend more That’s just not true, there are plenty of states that run surpluses. > Argentina leads a ranking of world tax pressure I didn’t say their tax policy was good, only that it’s difficult to address deficits when you can’t reliably collect taxes. It’s all related. The government doesn’t collect sufficient tax revenue => they raise taxes => people evade taxes => the government raises taxes more. Such backwards tax policy is a sign that those who can evade taxes are (usually mostly the elites, but to an extent everyone does it), and those who can’t are footing the whole bill.
mywittyname 5y ago
Can you pay for everyday items or rent in USD?
- Izikiel43 5y ago
  No, cash in pesos, you exchange usd from time to time.

627467 5y ago

Is tax evasion worst than trading on unofficial channels? I guess it depends on the jurisdiction doesn't it?

wbsss4412 5y ago
I mean none of it is good, but at the end of the day there’s no alternative when trust in government has totally broken down.

sbierwagen 5y ago

It's a failed state. The taxes don't go to schoolteachers or whatever, they go into the offshore account of the local boss.

wbsss4412 5y ago
I am in agreement there.