Chile: Left turn coming up
Ms. Bachelet wants to expand the welfare state. To pay for it she wants to raise corporate tax rates and to tax shareholders on retained earnings along with the dividend taxes they already pay. She would restore a role for the state in the now privatized pension system and has called for an “exhaustive review” of the Trans-Pacific Partnership that would deepen Chile’s commitment to free trade. Labor unions would get more power, and education spending would be sharply higher. Most troubling, the self-described admirer of Fidel Castro proposes changes to the constitution that would extend the reach of government and has not ruled out calling a constitutional assembly.
This, of course, would be disastrous not only for Chile, but also for the region.
The question then, is, how will Chile’s institutions hold up in the onslaught?