“From Elon Musk to the Pope”: a controversial project for a universal wage raises taxes and reallocates subsidies

In the midst of growing public pyrotechnics between Alberto Fernández and Cristina Kirchner due to the liquefaction of income caused by inflation, deputies from Kirchnerism close to social movements presented yesterday a Universal Basic Salary (SBU) project -it would be permanent, not transitory- whose implementation, in the midst of the implementation of the agreement with the International Monetary Fund (IMF), it would have a gross annual cost of 2.1 points of GDP and would be financed with an increase in the income tax and a reallocation of economic subsidies.

As told to THE NATION the authors of the initiative, this possibility was discussed a year ago -in the context of the pandemic- with the Minister of Economy, Martín Guzmán. “He conceptually agreed,” they said. However, he objected to the tax issue. “You could start with a smaller universe and then you can expand it,” they suggested. This medium consulted the Palacio de Hacienda, but still did not have an answer.

The project presented in the Chamber of Deputies bears the signature of Itaí Hagman, deputy of the Frente de Todos and referent of Patria Grande, close to Juan Grabois. The project was accompanied by Leonardo Grosso, Carlos Selva, Mónica Macha, Hugo Yasky, Jorge Antonio Romero, José Pablo Carro, Juan Carlos Alderete, Graciela Landriscini, Natalia Zaracho, Federico Fagioli, Lía Verónica Caliva, Claudia Beatriz Ormachea, Mara Brawer, Maria Rosa Martinez and Carolina Yutrovic.

“It would be a basic salary for independent workers; that’s the heart of the matter,” Grabois told THE NATION. “It is for all types of workers, including monotributistas of the lower classes. Add the workers in an informal dependency relationship and also those who are formal, but are below poverty, ”she added.

“Proposals like these are made by people from Elon Musk to Pope Francis”, he affirmed and completed in the midst of the official sparks for the income: “It is not an ideological question; but a pragmatic way of facing the reality of the world of work with dignity. We must put an end to labor informality, but in the transition we must guarantee income”.

How do its authors define UBS? “It is a non-contributory monthly monetary benefit of national scope for low-income people who are without full employment, work as self-employed or in the informal economy,” indicates the Hagman project to which this medium had access.

The beneficiaries would be unemployed, informal, social monotax workers, agricultural workers and private households. Category A monotax payers and registered wage earners whose gross income does not exceed the limit ($38,850 per month in 2022) would charge 50%. The project foresees considerations: finishing primary or secondary studies; vocational training and job training workshops; labor orientation workshops, for job search or orientation to Independent Work; Domestic Work Professionalization workshops; and development of socio-community activities.

The SBU can be complemented with a registration policy for low-income self-employed workers who work with unbanked incomes. For that, a National Registry of the Universal Basic Salary (ReNaSBU) would be created. “There are an estimated 2.5 million non-professional self-employed who carry out their activity without being registered in the Self-Employed, Monotax or Social Monotax regime. This universe is the core of the popular economy.” indicated a report from the Ocepp, the study center directed by Hagman, author of the project.

The amount is mobile -unlike the Emergency Family Income, which was fixed- and would be what the Basic Food Basket (CBA) indicates for an equivalent adult. By March of this year it would be $12,900. Another difference with the IFE -something that sets off the alarms of the IMF technicians who follow Argentina- is that it is a permanent non-transitory payment.

“With socioeconomic and patrimonial conditions, an amount of SBU to be granted is estimated at 9 million”, they indicated. They would be people from 18 to 64 years old. The SBU is not compatible with employment plans, but it is with the AUH.

The annual gross fiscal cost is 2.1% of GDP. However, if the expense incurred by other programs is subtracted, it would be 1.3% of GDP. Meanwhile, if the “fiscal return” is taken into account, the fiscal cost to be financed, say the authors of the project, would be 0.9% of GDP. Taking this last number into account, 0.58% of GDP, say the promoters, could be financed through a reallocation of 20% of energy and transport rate subsidies. “0.30% of GDP could be financed through the creation of a new section with a marginal rate of 45% in income tax for taxpayers whose net income subject to tax in 2021 exceeds $110,194 per month above the non-taxable minimum. , which is equivalent to monthly net salaries of approximately $200,000 in 2021″, they closed. The possible sources of financing do not appear in the project presented in Congress.

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