Fausta's Blog

American and Latin American Politics, Society, and Culture

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Argentina: Good news, bad news on taxes

The WSJ reports
Argentina Plans Overhaul of Tax Code. Country to slash corporate income taxes to 25% within five years
The tax elevator:
Going up,

  • 15% capital-gains tax on certain financial transactions
  • 10% tax on wine
  • 17% duty on champagne
  • raise taxes on sugared sodas
  • double the tax on beer to 17%
  • double taxes on private airplanes and expensive boats and motorcycles.

Going down,

The government aims to cut corporate income taxes to 25% from 35% within five years, reduce social security taxes on employers and eliminate taxes on certain bank transactions. Federal officials also plan to work with provincial governors to lower so-called gross income taxes on goods, Mr. Dujovne said.

And eliminate

  • 17% tax on cellphones, televisions and monitors
  • 10% tax on high-end cars.

The article points out that “Argentina ranked dead last out of 137 countries in a recent survey on tax-rate competitiveness by the World Economic Forum.” Macri’s administration is attempting to reverse decades of ruinous fiscal policies.

In Spanish: Clarín has dozens of articles on the proposed tax reform.

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Mexico: The Bloomberg soda law is not working

In 2012, Bloomberg Philanthropies provided $10 million for a three year plan to decrease soda consumption in Mexico, following which, Mexico enacted a 10% tax.

After an initial drop in purchases of sugary drinks, sales of soda are climbing

Coca-Cola Femsa SAB, the country’s largest Coke bottler, said last Wednesday that its Mexican soda volumes rose 5.5% in the first quarter from a year earlier. Arca Continental SAB, the No. 2 Coke bottler, reported soda volumes surged 11%.

The turnaround began last year, when Mexican soda-industry volume rose 0.5% after falling 1.9% in 2014, said data service Canadean.

Consumers also aren’t flocking to untaxed zero-calorie sodas. The market shares of full-calorie Coca-Cola and Pepsi-Cola inched higher last year to 48% and 11%, respectively, according to Euromonitor, another data service.

This is a classic case of elasticity of demand.

What may be more effective?

“If water was cheaper than soda, maybe I’d switch. But in the meantime I want flavor,” said Mr. Ramirez, after polishing off a 600-milliliter bottle of fruit-punch flavored Jarritos, a local soda brand.

The bottle sells for 6.50 pesos (about 37 cents) at a store near his shoe-shine stand, compared with at least 8 pesos for the same size of bottled water.

Rather than more taxes, maybe Bloomberg ought to look into that.

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The Panama Papers

Hashtag #PanamaPapers

No, the Panama Papers is not the title of a John Grisham thriller, it’s today’s top story in many LatAm countries and across the world.

What are they?
The Panama Papers are a huge trove of legal records from Mossack Fonseca, a Panama-based law firm, revealing

the secretive offshore companies used to hide wealth, evade taxes and commit fraud by the world’s dictators, business tycoons and criminals.

They were

initially obtained by German newspaper Süddeutsche Zeitung and subsequently the subject of a yearlong investigation, led by the International Consortium of Investigative Journalists (ICIJ) and involving more than 100 publications from nearly 80 countries

Süddeutsche Zeitung [WARNING: MUSIC STARTS RIGHT AWAY] About the Panama Papers

The ICIJ report: Giant Leak of Offshore Financial Records Exposes Global Array of Crime and Corruption.
Millions of documents show heads of state, criminals and celebrities using secret hideaways in tax havens

In this story

  • Files reveal the offshore holdings of 140 politicians and public officials from around the world

  • Current and former world leaders in the data include prime ministers of Iceland and Pakistan, the president of Ukraine, and the king of Saudi Arabia

  • More than 214,000 offshore entities appear in the leak, connected to people in more than 200 countries and territories

  • Major banks have driven the creation of hard-to-trace companies in offshore havens

Organized Crime and Corruption Reporting Project OCCRP report: ICIJ/OCCRP Panama Papers project yields unprecedented access to high level offshore corruptionOne of the biggest leaks in journalistic history reveals the secretive offshore companies used to hide wealth, evade taxes and commit fraud by the world’s dictators, business tycoons and criminals.

How big was it?

Who’s in it?

Ian Bremmer is tweeting lots of clever graphs on the PP.

More:
Time.com

With more than 2.6 terabytes of data comprising more than 11.5 million documents, the release of Panama-based law firm Mossack Fonseca’s records this week represents one of the largest data leaks in history—bigger than both the intelligence records revealed by former NSA contractor Edward Snowden three years ago and the U.S. diplomatic cables made public by WikiLeaks in 2010.

“Venezuela” shows up on 241,000 documents in the Panama. PapersLeaked files include names of ex-presidential security chief and wife, who amassed a fortune
Panama Papers: Who did what

Macri and Messi, too?

The Panama Papers leak explained

A new word: Putinophobia!

“It is clear that the degree of ’Putinophobia’ has reached such a level that it is impossible a priori to speak well of Russia,” Mr. Peskov said in comments carried by state news agencies.

O Globo (link in Portuguese) says that Russia’s accusing former CIA agents of being behind the leak.

How secret offshore money helps fuel Miami’s luxury real-estate boom

Video below the fold,
[Read more…]

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New Jersey: It’s the taxes, stupid.

njtaxEd Driscoll, posting at Instapundit, links to Lee Habeeb’s article, Fleeing New Jersey, and Its Crushing Taxes, for a Better Life

The home my father thought he owned outright had a co-owner: the local city council and school board. And it was a co-owner with an appetite for spending. Home ownership may have had its privileges, but it became a burden he could no longer afford.

The local property-tax bill alone was enough to make him move. On top of that, New Jersey went from having no state income tax to having one of the highest in the country (8.97 percent for the highest earners, and 6.4 percent for the middle class), and from having no sales tax to having one of the highest rates in the country (7 percent, almost as high as California’s, which is the highest sales tax in America, at 7.5 percent).

Let’s not forget the estate tax, and the inheritance tax, too.

When you sell your house, you have to pay a tax on the total sale (not on the profit; on the total sale), which in my case was an exit tax.

As a result,

New Jersey led all 50 states in one tragic category: creating refugees. Last year, the Garden State lost more residents as a percentage of its overall population than any other state in the country, according to a 2014 National Movers Study commissioned by United Van Lines of St. Louis.

I remember last year I was in Rick Moran’s podcast with Jazz Shaw, who asked, why did I moved from New Jersey? When I truthfully replied, “because of the taxes,” Jazz diverted the conversation and asked another guest whether taxes were an important election issue, who, if memory serves, said they weren’t.

Having voted with my feet, I can assure you, New Jersey taxes ceased to matter the moment I moved away.

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Taxes, and a book

Don’t miss these:

First, taxes:
My latest article, I’m a tax exile, and proud of it, is up at Da Tech Guy Blog.

Then, the book:
In tonight’s podcast at 8PM Eastern, Silvio Canto and I will talk to Alina García-Lapuerta, author of La Belle Créole: The Cuban Countess Who Captivated Havana, Madrid, and Paris, a biography of Mercedes Santa Cruz y Montalvo, a fascinating character.

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The BVI, China’s new tax haven

The Caymans are so 1990s:
China’s princelings storing riches in Caribbean offshore haven
Relatives of political leaders including China’s current president and former premier named in trove of leaked documents from the British Virgin Islands

The disclosure of China’s use of secretive financial structures is the latest revelation from “Offshore Secrets”, a two-year reporting effort led by theInternational Consortium of Investigative Journalists (ICIJ), which obtained more than 200 gigabytes of leaked financial data from two companies in the British Virgin Islands, and shared the information with the Guardian and other international news outlets.

In all, the ICIJ data reveals more than 21,000 clients from mainland China and Hong Kong have made use of offshore havens in the Caribbean, adding to mounting scrutiny of the wealth and power amassed by family members of the country’s inner circle.

Inner circle indeed. Go to link above to read the names of the people involved.

Of course, there’s no disclosure required from party leaders, so, who knows?

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Mexico: “Shame and Name”, Blacklisting for taxes

Coming soon to the USA?

Mexico’s Tax Black Lists Prove Controversial
Mexico’s new practice of publishing lists of people and firms that it says have ongoing tax problems is being called faulty and unfair by some

The first black list, posted in early January on the website of the Tax Administration Service, or SAT, named about 89,000 people and firms for a variety of alleged violations or debts, and included TV stars, a major soccer team, and the Roman Catholic diocese in Acapulco.

On Friday, the SAT published another list of 163 companies or people who allegedly issued false invoices for tax purposes, or who weren’t found at their tax addresses.

You can get blacklisted if the tax collector says you’re “unlocatable.”

The article does not state whether there’s an appeal process.

Here in the USA, The IRS Scandal, Day 248. If you don’t think the IRS scandal matters, you may have already bought a bridge.

And, an appeal: Dear Uncle Sam: Don’t Accept the World’s Bad Ideas
The pet food tax? The meat-pasty levy? The gigantic tax on big earners? Beware dumb concepts from abroad, says Joe Queenan.

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