The Proposed Wealth Tax on Colombia's 4,700 Richest People Would Raise $1 Billion
AUGUST 5, 2022
BY OMAR OCAMPO
The same day as his historic inauguration on August 7, the newly-elected President of Colombia Gustavo Petro will introduce his ambitious tax reform bill to Congress. The proposed legislation would collect $50 trillion Colombian pesos annually – approximately $12.5 billion USD – through a new, progressive tax system.
It is an unprecedented sum of money for the Colombian state, but the coalition that makes up the Pacto Histórico considers it a necessary measure to address both the fiscal deficit that ballooned under former President Iván Duque and to finance the proposed social programs designed to alleviate poverty and reduce economic inequality. While the bill is yet to be finalized, a progressive wealth tax on the nation’s millionaires and billionaires will be a core feature.
During the presidential campaign, Petro declared he would focus on the fortunes of 4,000 of the most affluent families in the country. But since his historic victory in June, his economic advisors have sent mixed messages on who exactly will be subjected to the reform. According to Colombian economist Ricardo Bonilla, the wealth threshold will be lowered to $1 billion pesos, or $250,000 USD.
The Colombian right reacted strongly, arguing that such a threshold will increase the tax burden on the middle-class. But given the unequal distribution of wealth in the country, this is unlikely. A Credit Suisse report released last year found that the median wealth per adult in Colombia is just $4,854 USD, and only 2.6 percent of adults have a net worth of more than $100,000 USD.
More:
https://www.counterpunch.org/2022/08/05/the-proposed-wealth-tax-on-colombias-4700-richest-people-would-raise-1-billion/