The unpleasant effects of tight money

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The unpleasant effects of tight money

Noviembre 2017

October was a month with plenty of news, in both the political and the economic side. Regarding elections, the ruling party not only prevailed in the province of Buenos Aires, but it also won in 13 other provinces and scored the five most populated districts (Province and City of Buenos Aires, Córdoba, Santa Fe, and Mendoza). At a national level it received 41.9% of the total votes and it expanded its electoral base by almost five points compared to the primaries in August.

Emboldened by these results, the Government announced its tax reform project, which involves lowering the tax burden for companies in order to boost investment and increasing it for individuals, seeking to increase the incidence of more progressive taxes. The most discussed topic so far is a new tax on financial income for individuals. Although this type of tax exists in most countries, it is particularly controversial in Argentina because inflation is high.