11/9/2022 - Economy and Finance

Salary Tax

By enrique tourvel

Salary Tax

The state advance on an increasingly impoverished working class

For the second quarter of 2022, the National Statistical and Census Institute (INDEC) announced an unemployment rate of 6.9%, on the other hand, indicated that 36.5% of the population is under the poverty line. Although it is true that it results methodologically - at least - little needs the comparison of these two variables, it appears timely to the effects of recording what is intended here to claim: the Argentine Republic has a large percentage of workers under the poverty line.

Real wages are at historical minimums, such as the non-taxable minimum for the payment of the tax called Ghanaian tax.

The origin of the tax as an income tax

The income tax began to be improved at the state level in 1798 in England, taxes were replaced. assessed taxes by a general tax on people possessed fortunes, dividing these into 3 progressive categories according to their wealth. Then, the twentieth century, distinguished the incomes earned and not won, i.e. the tribute operated on the gain obtained from work or the simple placement of capitals. The rate ended evolving to the overall earnings pickup, giving it a personal character and setting rates on progressive bases.

At the national level, the Ganas tax was established in 1932 through law 11.682 until it reached the current law 20.628 (with several modifications) in 1974. It is to be noted that we will refer to the earnings of the fourth category (Law 20,628: 79) by which the salary is recorded.

The expansion of profits tax over the past 20 years

What is meant to be explained through this article is how the tax on earnings was anchored - through the non-modification of scales added to inflation and the consequent nominal adjustment of wages - the more and more taxpayers until today Juana, an analyst of a multinational who with his salary of 330,000 gross pesos has to, after paying his contributions and other deductions, deliver to the State the sum of $33,881 in the concept of tax to exchange his labor for money. Then, with your remaining $240,000, you must pay a rent in the City of Buenos Aires (an average department of 3 environments is rented for $100.000 per month according to data from zonaprop.com.ar), keep your two children under age, dress, feed and try to reach the 20th of the month.

Was this always like this? No. In principle, income tax was only for employees with high income. In 1990 this tribute represented about 4% of the gross collection, reaching the historical record of 22.1% in 2020. Moreover, in 2003, only 500,000 people were hit by this tribute, while in 2020 the number amounted to 2.3 million people. Has the economically active population multiplied for five? Has the country, along with its people, exponentially increased its earnings in real terms? The first question answers alone. In the second, we can see that from 2003 to 2020 we had 7 years of recession and that current per capita GDP is even lower than 2001 in nominal terms.

So we are faced with a state that used inflation and the non-renewal of the taxpayers to conquer more taxpayers through an easy-to-charge tax and difficult evasion.

The Avalists

In a country with half of the economy in an irregular situation, the defenders of this tribute are heard in its progressiveness and in which it only affects the highest decile of the population, calculated with its data from the formal economy which -repite - covers only half of the cake.

Concerning should be for these tax advocates that those encompassed within this decile, such as Juana, have a real wage so low that they do not reach to sustain a middle class life, but still cover 10% of their gross salary (14% of the net) in the concept of tax towin.

It is time to sincerely generate the conditions for the formalization of the economy and begin to re-invent a state that, extending into a speech by Robin Hood, erects himself in an anti-hero by Roberto Arlt and takes away those who no longer have to continue financing a model that has expired for at least ten years.

For this note we used bibliography of Sebastián Pablo Espeche, data of the INDEC, of the World Bank, Studies of the National University of Avellaneda and of zonaprop. com.ar.-

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enrique tourvel

enrique tourvel

Hi, I'm Enrique Tourvel, a lawyer with public law guidance. Currently I perform in the Judiciary of the Nation - Fuero Comercial. Professor of General Elements of Commercial Law and Societies at the University of Buenos Aires.
Specialized in corporate law.

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