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Ayn Rand would not have liked this.

Under the disguise of a noble cause, the municipality of Bariloche (Rio Negro) will issue a special tax to corporations who do business within the limits of the city but have their headquarters out of the city limits. The sum levied on these corporations will range from a minimum of $5,000 pesos per month up to $15,000/month depending on annual sales volume.

In another example of how peronists push for income redistribution without any logical planning or with no consideration for future consequences, the money raised will be destined to promote social and educational activities to the lower end of the population -who, in their view, has been so far “excluded”- by means of maintaining or developing the appropriate infraestructure for cultural, recreational and sport endeavors. These activities will mostly cater to the very young or very old.

In reality, “ediles and concejales” are sending out the message that they are unable to cut expenses and make the administration of the city more efficient, where it has been said up to 80% of the budget goes to pay fat salaries. The unintended consequences may be that some or many of the targeted firms who have been doing business in the region may just opt to settle in nearby towns of San Martin de Los Andes, Villa La Angostura or even Junin de Los Andes.

This measure would affect foreign businesses of any kind, as long as their annual gross sales are over 8 million pesos. The cuttoff line seems to be 30 million in annual sales, above which firms would contribute the maximum of $15,000 pesos per month. In an ironic twist, these levy has been described as both “solidary and mandatory”.

It was two years when this tax was sponsored by Daniel Pardo, a “concejal” from Rio Negro, who based on a research conducted by the “Centro de Estudios Regionales” learned that Bariloche’s GDP was one of the highest in the nation while porverty levels were above 30%. His view was that corporations making money would not reinvest it locally but move funds away from Bariloche. “Corporations making money” being the bad word. Or offensive phrase.

It is apparent that businesses that help drive tourism to the area and are in part responsible for having these crowds spend their monies on local goods and services, patronizing a vast and diverse array of mom-and-pop shops during their stay, means little. While reaching for the populace vote through enchanted “income redistribution” songs, means much. Even though in the long run those for whom this measure has been enacted may see a smaller economy, less oportunities and even higher personal taxes.

Brilliant.

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