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Critics say a wealth tax wouldn't work. Argentina just brought in $2.4 billion with one.

Published by Business Insider on Tue, 04 May 2021

<p><img src="https://static3.businessinsider.com/image/5fcba226b6a3a800199b6dc7-1332/AP20036511234117.jpg" border="0" alt="Congress in Buenos Aires, Argentina." data-mce-source="Natacha Pisarenko/AP" data-mce-caption="Congress in Buenos Aires, Argentina."></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>A one-off wealth tax on the wealthiest Argentinians brought in around $2.4 billion to help address pandemic costs, according to the <a href="https://batimes.com.ar/news/economy/argentinas-wealth-tax-fought-by-the-rich-raises-us24-billion.phtml">Buenos Aires Times</a>.</p><p>In December, Argentina's Congress voted to pass a levy on those with assets over 200 million pesos, <a href="https://www.businessinsider.com/argentina-millionaire-tax-passed-cover-cost-of-covid-19-supplies-2020-12">Insider's Joshua Zitser reported</a>. The measure passed by 42 to 26 votes, although it did see some intense political opposition. According to the <a href="https://www.bbc.co.uk/news/world-latin-america-55199058">BBC</a>, the tax was only set to impact the top 0.8% of the population, and about 10,000 people ended up paying the tax, according to some early data. They saw a levy of up to 5.25% on their total assets.</p><p>Argentina's wealthiest reportedly pushed back on the tax, with some moving to take legal action. Others procrastinated on paying; payments were due April 16, but the Buenos Aires Times reported that only 2% of taxpayers subject to the tax had paid up by early April.</p><p>The revenue raised will go toward areas impacted by the pandemic, like housing, scholarships, public health, and relief for small businesses. Overall, the amount that the taxes brought in comes to about 0.5% of the country's GDP, according to the Buenos Aires Times. The newspaper reported this was a higher amount than expected.</p><p>As the subject of wealth taxes has gained steam internationally during the pandemic, critics have emerged, citing issues ranging from feasibility to even legality. Argentina's example suggests their critiques could be wrong, and wealth taxes have viability.</p><h2>One-off wealth taxes have emerged as a possible pandemic recovery solution</h2><p>The International Monetary Fund <a href="https://www.businessinsider.com/wealth-tax-corporate-tax-support-stimulus-economic-recoveries-coronavirus-imf-2021-4">has said</a> that temporary taxes on the wealthy could help the global economy rebound from the coronavirus recession. That statement from the IMF marked a major shift from its own policiesand perhaps highlights the increased traction of one-off wealth taxes as a way to curb inequality and help economies rebound from pandemic devastation.</p><p>Experts in the UK also called for a one-off measure in December, saying it could bring in around 260 billion pounds. The <a href="https://www.businessinsider.com/reviews/out'originalUrl=https%3A%2F%2Fstatic1.squarespace.com%2Fstatic%2F5ef4d1da53822a571493ebd0%2Ft%2F5fd0a2a026d54b3c06d6ff67%2F1607508643546%2FA-Wealth-Tax-For-The-UK.pdf&amp;postSource=bi%7C606dd1a469de4a043f5bdc5f&amp;sessionid=1620143661239lc6ej9lw&amp;type=ALREADY-AFFILIATE-LINK-NOT-AMAZON&amp;u=https%3A%2F%2Fstatic1.squarespace.com%2Fstatic%2F5ef4d1da53822a571493ebd0%2Ft%2F5fd0a2a026d54b3c06d6ff67%2F1607508643546%2FA-Wealth-Tax-For-The-UK.pdf" data-analytics-module="body_link" data-analytics-post-depth="100" data-uri="701afe23a45423c84f2826ffa12b012f">Wealth Tax Commission</a> was proposing a 1% tax on wealth over 500,000 for five years. One-off taxes do have some precedent in the UK, and potential taxes on wealth may still be looming <a href="https://www.fnlondon.com/articles/wealth-managers-warn-uks-richest-a-wealth-tax-is-coming-20210304">across the pond</a>.</p><p>On this side of the Atlantic, Sen. Elizabeth Warren has been an outspoken advocate for a straightforward wealth tax on Americans with a net worth of $50 million or more. Her proposalwhich would be permanentcould bring in <a href="https://www.businessinsider.com/wealth-tax-would-have-raised-114-billion-elizabeth-warren-2020-2021-3" data-analytics-module="body_link" data-analytics-post-depth="100" data-uri="92497d7e0cb9da24453393b48e3a9eec">$1.4 trillion over 10 years</a>. A <a href="https://www.businessinsider.com/over-half-americans-see-wealth-tax-as-way-solve-inequality-2021-4">majority of Americans</a> support a wealth tax as a way to curb inequality.</p><p><em><strong>Read more: </strong><a href="https://www.businessinsider.com/wealth-advisors-biden-administration-taxes-estate-planning-capital-gains-2021-4'IR=T">Advisors to the wealthy are fielding a frenzy of calls from clients worried about estate planning and taxes. Here's how they're navigating the chaos.</a></em></p><p>One of the most prominent wealth-tax critics has been billionaire Leon Cooperman; <a href="https://www.businessinsider.com/billionaire-leon-cooperman-speaks-out-wealth-tax-elizabeth-warren-cnbc-2021-3">he's said</a> that he doesn't think a wealth tax is intelligent or legal. He's also said the ultrawealthy would hide their assets. That's an assertion that's <a href="https://www.businessinsider.com/nobel-prize-economist-dont-tax-wealthy-because-theyll-dodge-it-2021-4">been echoed</a> by inequality expert and Nobel Prize-winning economist Angus Deaton: He told <a href="https://www.bloomberg.com/news/articles/2021-04-12/nobel-economist-warns-against-wealth-tax-to-pay-for-pandemic'sref=BLKWHazc">Bloomberg</a> that a wealth tax would be difficult to implement, and the wealthy would try to avoid it.</p><p>President Joe Biden seems to be opting for taxes that target the wealthy, but don't necessarily constitute a wealth tax. He's proposed, among other measures, raising the income tax rate for Americans making over $400,000, upping the tax rates on capital gains, and increasing the corporate tax rate.</p><p>"It's time for corporate America and the wealthiest 1% of Americans to just begin to pay their fair share," Biden said in his <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/29/remarks-by-president-biden-in-address-to-a-joint-session-of-congress/">address</a> to the joint session of Congress.</p><p><a href="https://www.businessinsider.com/one-time-wealth-tax-in-argentina-brought-in-24-billion-2021-5#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/doomsday-prepper-million-dollar-condo-converted-missile-silo-2019-3">Inside a $3 million doomsday condo that can sustain 75 people for 5 years</a></p>
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