Unifying taxes it is possible to lower their burden

Lowering the tax burden at the expense of losing public revenue contradicts the zero deficit target. In Córdoba province, the financial and administrative pressures on small taxpayers have been reduced increasing public revenue. This has been obtained by unifying national, provincial and municipal taxes.

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PAMI has a structural insufficiency of resources

The health coverage of retirees receives few resources given the high elderlies’ health care demand. Keeping the influx of retirees in the scheme will aggravate the shortage. A recent policy change promoting that people preserve the health coverage associated with their job when they retire will improve sustainability.

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Double coverage in the pension system is growing

In the list of topics proposed by the government to be agreed with the political parties, one key point is to give sustainability and equity to the pension system. Though there are several problems, one particularly destabilizing factor is the sustained increase in double coverage in pensions. (more…)

The zero deficit target is not enough to put an end to the crisis

Even though the primary deficit has been falling, the rise in country risk reflects a deep distrust in Argentina’s ability to repay its public debt. The way out is not to change the cabinet or the candidates for the polls, but to take steps in the direction of structural reforms demonstrating the decision to build fiscal solvency.

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Instead of abandon it, the fiscal consensus should be deepened

The government announcements to alleviate the crisis include re-freezing utility prices. Thus, a pillar in the goal of reducing public spending and eliminating inequities is canceled. Instead of regressing in such a strategic issue, such as utility prices, a deepening of the Fiscal Consensus should be worked.

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Dollar increased the double than prices and salaries

In recent months there have been some corrections in the external and fiscal deficits. However, the process is complicated due to worsening social tensions and weakening tax collection. Lowering public spending more sustainably will ease the transition to a more stable economy and this will permit to resume growth.

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Public revenues in Argentina are higher than in Chile and Uruguay

The IMF expressed concern because tax revenues grow below the projected. This is contradictory given the very high tax pressure of Argentina. The experience of neighboring countries suggests that with less but better-managed public spending, the fiscal deficit can be reduced and the social situation improved.

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Argentina has 4 times more poverty than Chile and Uruguay

Although it was predictable, the increase in poverty reported by the INDEC generated consternation. As the experience of neighboring countries shows, less opportunism and more professionalism are needed at the three levels and branches of government to achieve better social results.

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Inflation reduced jobs destruction

Surprise prevailed given that the crisis has not generated a higher rise in unemployment. The main explanation is that the acceleration of inflation caused a deep loss in the real value of labor costs. This fact, together with the increase in informal jobs, was the rudimentary way by which the labor market adjusted.

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School failure is greater in state-run schools

The APRENDER 2017 tests show that state-run schools have worse results than private schools. This implies that poor people have access to an education of lower quality. Improving the management of state-run schools and methods of financing public education could prevent this serious social inequality. (more…)