Argentina – Millionaire’s tax
Argentina parliament has imposed ‘millionaire tax’ on about 12,000 of the country’s richest people to fund coronavirus countermeasures. Under this scheme, people with declared assets worth more than 200 million pesos will pay a progressive rate of up to 3.5% on wealth in Argentina and up to 5.25% on wealth outside the country. The revenue arising from this tax will be used to finance health, social development, student scholarships and natural gas ventures. This is being done to bring relief to the poor and the small businesses in the country.
The millionaires’ tax is a one-time contribution. It will help Argentina with about 3.7 billion USD. The funds collected through these taxes are to be allocated to small and medium business, medical equipment and supplies, fund natural gas projects and support students and social programs. The split of the funds in These areas are are as follows
- 20% will go to the medical supplies
- 20% to small and medium sized businesses
- 20% to students scholarships
- 15% to social development
- 25% to natural gas Ventures
This scheme is to affect 12000 taxpayers. However, it will boost the overall economy of the country
Argentina has a population of 44 million and around 1.4 million are badly affected due to covid-19 according to Johns Hopkins University. Also, Argentina is currently facing third straight year of recession. The economic activity in the country has declined to 12% in 2020.
Similar law was passed by New Jersey of United States of America. In September 2020 the New Jersey government boosted the tax rate of the New Jersians owning more than 1 million USD annually. Their tax rates were boosted from 8.97 percent to 10.75%. Earlier 10.75% of tax rate was applied only to people earning more than 5 million USD annually. However, the term millionaire’s tax was introduced in 2004 in New Jersey.
In India, the wealth tax was abolished in 2016. It was replaced with a 2% surcharge on super-rich individuals in the country. The super-rich individuals are those whose income is greater than Rs 10 crore annually.