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Unusual Argentina: Profits pay salaries that are just above the poverty basket

2020-10-06T17:41:49.565Z


The basic basket for a typical family is $ 45,477. And a married person with two children begins to pay the tax from income of $ 73,102


Ismael Bermudez

10/06/2020 - 12:15

  • Clarín.com

  • Economy

Increasingly, the basic family poverty basket is approaching the value of the minimum non-taxable income.

And this means that it is

enough to have a salary a little higher than the value of the poverty line so that the Income tax is deducted

.

And at the same time, the tax takes a larger part of the workers' income and a smaller portion remains for the basic needs that individuals and families need.

For example, as of August, the non-taxable minimum for a married person, spouse and 2 children was $ 73,102 and the basic family basket was $ 45,477.

In other words, the basic basket represented 62.2% of the non-taxable kitten.

Just a few years ago, that ratio came to represent 40%.

This means that instead of $ 73,102, the non-taxable minimum should be $ 113,692.

Consequently,

Earnings from lower real income begins to be taxed.

Tax

expert César Litvin

gives another example.

“Starting from 2019 until August inflation, the non-taxable minimum for singles should be $ 84,291 (today it is $ 55,261) and that of married with a spouse and two dependent children at $ 111,504, when today it is $ 73,102.

Tax

expert Daniel Lejman

says that “in 2016, as a result of the postponement in the increase of the non-taxable minimums and the lag that they dragged in relation to inflation,

the non-taxable minimum was exactly equivalent to the cost of the basic family basket

.

In 2017, with the update of the non-taxable minimums, well above inflation, it was possible to double the amount of the basic family basket.

From then on, the non-taxable minimums once again lost the race against inflation, reaching August 2020 with a basic family basket that only covers 62% of the non-taxable minimum amount ”.

For example, the non-taxable minimum was adjusted for this year by 44.27%, below the 53.8% inflation of 2019. Thus, with wages in real terms lower - due to the loss in relation to the rise in Prices -

the weight of Earnings in workers' salaries is greater.

Litvin explains that “this great difference originates from two reasons.

The automatic adjustment of the non-taxable pussycat is updated by the RIPTE, which is an average wage index that has been below inflation.

And because the update of this minimum is annual and in times of high inflation it is insufficient to keep it adequate to the increase in consumer prices ”.

Litvin says that

“the solution to this problem is to change the update index for the Consumer Price Index (CPI)

and adjust the deductions on a

semi-annual basis

.

If the current criteria are followed, the State is collecting the income tax

without adequately measuring the economic capacity of the taxpayers

.

Conceptually, the non-taxable cat must consider the subsistence expenses of the workers.

If these expenses increase and the minimum remains unchanged,

the income tax takes part of what is necessary for the sustenance of individuals and families

”.

NE

Look also

In one year, wages fell almost 7% relative to inflation

The social drama deepens: poverty jumped to 40.9% and affects 18.5 million people

Source: clarin

All business articles on 2020-10-06

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