Veto yes? Veto no? Que sé yo?
The government has gone into a head spin after a “nightmare” defeat in the Chamber of Deputies, publicly back-flipping on whether it would veto the opposition’s income tax reform bill if approved by the Senate.
The bill, introduced by a newly invigorated opposition, and pitted against the government’s own income tax reform bill, was approved by the Chamber of Deputies on Wednesday morning, much to the government’s embarrassment.
Last night, Vice President Gabriela Michetti said that the government would have “no alternative” but to veto the proposed legislation doubling the minimum taxable income threshold and reinstating taxes on mining and gaming, if approved by the Senate.
“We don’t have any alternative but to veto the law. Why? What do we do about the money? Where do we get it from?” she said on the television show, Intratables, tapping into the narrative of fiscal and political “irresponsibility” that the government has been sketching about the opposition.
“We have the responsibility to govern well,” she said, in response to the claims that the veto would represent an attack on working class people. “Good government implies taking measures that aren’t always popular.”
But after what must have been an agitated night, the government has come out with a new strategy. On radio this morning, Michetti presented a more conciliatory face, saying that the government would attempt to negotiate with governors (who rely on the funds raised through taxes on income) and senators to modify the proposed law.
“The truth is we won’t arrive at the stage of using the veto”, she said, allegedly after conversing with Cabinet Chief, Marcos Peña. Instead, the government would attempt to work with the opposition to make amendments to the bill.
Income tax has become a massive headache for the government. During his election campaign last year, Macri promised to eliminate income tax for workers. However, that election promise is a distant memory – this year, 50,000 more workers began to pay the unpopular tax.
(Of course, Macri’s not the only one with a dodgy record. As many have pointed out, including the President, many of those who make up the opposition did nothing to change the law “for more than a decade” when they were in government.)
With the economy slumping and inflation rising, the opposition, led by Renewal Front deputy, Sergio Massa (aka “the most untrustworthy person in the argentine political system,” according to Marcos Peña), smelt an opportunity to gain electoral territory, and proposed its own income tax reform bill. The bill, which is generous to workers, would see the minimum taxable income threshold rise to $44,000 pesos (2,751USD) a month for a married person with two kids and $34,500 for singles, as well as an updated scheme of tax deductions.
If approved by the Senate, the government can veto the law. However, using the power of veto is something that Macri would prefer to avoid, particularly given he has attempted to pitch himself as a more democratic, consensus-based leader than his predecessor.