<>< Josh Rule : : 2008 MCPP Intern
BBC news reported today that in a 37-36 decision, the Argentine senate recently voted to nix a major tax increase on agricultural exports. The official reasoning from the government for the increase has been that farmers are doing well in the current economy, and the money is needed to fight poverty. Farmers have argued that low-tax exports are needed to get the agricultural bounty of Argentina to a hungry world.
Farmers around the country are understandably rejoicing, because the rejected tax hike would take taxes on exported soya, a major Argentine crop, from 35% up to 45%, among other things. Soya is one of Argentina’s primary exports. To cast his tie-breaking vote, vice president Julio Cobos said, “They tell me I must go along with the government for institutional reasons, but my heart tells me otherwise. May history judge me, my vote is not for, it’s against.” The crowds of farmers watching the culmination of the 16-hour debate on big-screen TVs in nearby parks burst into cheering and applause upon hearing Cobos’ decision.
Although they still have a long way to go to clear up the mess surrounding the recent increases in taxation, this step is encouraging for the people of Argentina. It gives the government a chance to see what good can come even of the smallest steps toward fiscal responsibility. Falsifying inflation rates and drastically increasing taxes are not solutions to economic trials, but fostering enterprise in a free market is. So, if a tax increase can be defeated now, that is a wonderful step for Argentina. It can only be hoped that the reform continues.
For more commentary on the events leading up to the recent decision, check out this Q & A.