Creation: Proletarian Liberation Struggle Association Political Economy Group
According to the Argentine newspaper Clarín, on the evening of the 10th local time, Argentine President Milei delivered a televised speech announcing a package of economic policies. These include the abolition of 90% of the current national tax categories. Milei also stated that Argentina will continue to promote large-scale tax cuts next year. Additionally, Argentina will permanently abolish exchange controls and allow the free use of the peso and other currencies for transactions and settlements in domestic markets outside the tax system. At the same time, it will restore the fiscal autonomy of provincial and local governments to simplify the tax system and decentralize tax administration.
The tax and trade reform measures announced by the Milei government are almost entirely aimed at attracting foreign capital to invest in Argentina. Regarding the policy of reducing national taxes, Milei said: “Next year, we will see true tax competition among the provinces to see who can bring in more investment.” The reduction of taxes will primarily benefit foreign capital by increasing profits and lowering costs from investments. The Argentine bourgeoisie’s practice of selling off the country’s resources, labor, and markets to foreign capital is a thorough comprador behavior. Abolishing exchange controls means more foreign currencies will be involved in transactions in Argentina, greatly increasing the foreign exchange reserves held by the Argentine government. This behavior of the Argentine bourgeoisie, which seeks to amass large amounts of foreign exchange income, indicates that they are ready to abandon their own currency at any time, allowing the economic system to collapse.
Milei loudly proclaims “eliminating inflation” and implements a series of austerity policies and layoffs of civil servants in an attempt to eliminate fiscal deficits and reduce government expenditure. However, these measures cannot eliminate the inherent economic crises of capitalism. On the contrary, the unemployment caused by Milei’s policies will inevitably lead to declining wages and worsening proletarian poverty, making the economic crisis more intense. When that time comes, these comprador bourgeoisie who rely on deceiving the people to amass wealth will immediately choose to flee, leaving a mess for the Argentine people.
Despite Milei’s government claiming to “free the people from taxation,” in reality, it is implementing a thoroughly sellout policy that will only push the Argentine people further into poverty. The reduction in tax categories does not mean a decrease in total tax revenue. According to Argentine law, as a federal country, its government system consists of the central government, provincial governments, and municipal governments. Therefore, Argentina implements two types of tax systems: federal taxes and local taxes, with the federal and provincial governments having relatively independent legislative powers over taxation. The so-called “giving more fiscal independence to local governments” by the Milei government actually means they will be further encouraged to exploit the working masses, thereby exacerbating the poverty of the people.