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11/19 roundup: Wealth tax and some economic life signs

Abortion next on the agenda after Senate completes special tax approval

By | [email protected] | November 19, 2020 12:45pm

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-The ruling Frente de Todos coalition, with Máximo Kirchner acting as its spearhead in the House of Representatives, secured the passing of a one-time emergency wealth tax in the lower chamber yesterday morning by 133 votes in favor vs. 115 against the initiative. The bill is now moving for a quick approval in the Senate, where Peronism holds a majority of its own and won’t need to negotiate with the opposition. The government is expecting to collect 3 billion pesos with the initiative, or 1 percent of GDP, by taxing the richest 10,000 Argentines for up to 3.5 percent of their declared wealth, although it is highly likely that the initiative will go through a series of legal challenges in court before anything can be enacted.

-Also moving through Congress is the bill to legalize abortion, which was sent to Congress this week and, according to President Alberto Fernández, will have the full backing of the Executive branch to ensure its passing, a tacit dig at his predecessor Mauricio Macri, who sent a similar bill for Congress “to debate,” but ended up coming out as pro-life and siding with its rejection. The legalization bill was accompanied by another project to economically protect mothers and their children since pregnancy and throughout their first 1,000 days of life.

-The chances of Argentina seeing an economic bounce in the coming months are now up to 98 percent, according to Di Tella University’s Índice Líder, similar to the US’ Conference Board Leading Economic Index, which combine indicators that usually anticipate downward or upward turns in the economy months before they happen, including stock valuations, activity in wholesale markets, real estate transactions, bankruptcies and payment delays. This does not necessarily mean that the country will recover the levels seen prior to the pandemic or the 2018 crisis, but it is likely to be a sign that at least a partial and/or temporary recovery is imminent, despite the macroeconomic trouble that the country is still under.

-Although new daily COVID-19 cases have been slowly going down in several important areas of the country, this does not mean that the pandemic is anywhere near beaten in Argentina, which still has some of the largest (measured) death per capita totals in the world. Outbreaks are still occurring in many districts, and yesterday the national basketball league was suspended by the government after 28 players across multiple teams and 8 referees all tested positive. As we all should know by now: lots of unmasked people mixing indoors = likelihood of trouble.