Alex Fischer defends the modification of tax bases for individuals

by | Nov 4, 2021

Alex Fischer comments, in Diario Financiero, about the possibility of modifying the exempt sections so that people start paying more taxes. He assures that it is the right way, since “is the only way to really increase the collection. The problem in Chile is that a significant part of the richest 10% of the population pays practically no income taxes. For example, a person who earns 2.5 million pesos per month pays an effective 4% income tax. Even if that person does not feel rich, they are among the richest 10% of the Chilean population. In contrast, the richest 1% do pay income taxes at rates comparable with OECD countries and, therefore, there is not much room to continue rising in that segment. However, the fifth quintile, the rich in Chile, practically does not contribute in the income brackets below 3.5 million. It is true that this analysis must be complemented with the incidence and collection of VAT. However, the approach to modify the lower income tax brackets remains correct.

In any case, we must bear in mind that although the taxpayer is the people, economically an important part of the higher tax would end up being borne by the employers, because these are sections in which skilled labor prevails, negotiating liquid wages ”.

To read the note in DF here.

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