The Chile Economy, Social Crisis and Virus Impact

[El Ping]

Consumption taxes hit the ones least able to afford it. A poor or lower economic class person spends 100% or more of their salary, much of it subject to IVA. A wealthy person does not spend their full earnings and in effect hides it from IVA.

As I said some time ago..... stop charging IVA on food... that would be a quick and easy boost for poor peoples living standards.

What does the Chilean tax scale look like?
In Australia the minimum wage -- which allows a family to live in 'frugal comfort' ... is about $A740 a week or about $A40,000 a year

The tax scale is .....
Income thresholds Rate Tax payable on this income
$0 – $18,200 0% Nil
$18,201 – $37,000 19% 19c for each $1 over $18,200
$37,001 – $90,000 32.5% $3,572 plus 32.5% of amounts over $37,000
$90,001 – $180,000 37% $20,797 plus 37% of amounts over $90,000
$180,000 and over 45% $54,096 plus 45% of amounts over $180,000

How does that compare ?

GST/IVA is 10%

The economies look much the same.... minerals and agriculture....

[admin]

Consumption taxes hit the ones least able to afford it. A poor or lower economic class person spends 100% or more of their salary, much of it subject to IVA. A wealthy person does not spend their full earnings and in effect hides it from IVA.

As I said some time ago..... stop charging IVA on food... that would be a quick and easy boost for poor peoples living standards.

What does the Chilean tax scale look like?
In Australia the minimum wage -- which allows a family to live in 'frugal comfort' ... is about $A740 a week or about $A40,000 a year

The tax scale is .....
Income thresholds Rate Tax payable on this income
$0 – $18,200 0% Nil
$18,201 – $37,000 19% 19c for each $1 over $18,200
$37,001 – $90,000 32.5% $3,572 plus 32.5% of amounts over $37,000
$90,001 – $180,000 37% $20,797 plus 37% of amounts over $90,000
$180,000 and over 45% $54,096 plus 45% of amounts over $180,000

How does that compare ?

GST/IVA is 10%

The economies look much the same.... minerals and agriculture....

That all needs to be converted to dollars. IVA is not income tax.

[admin]

well seems some bargain shoppers are showing up to buy chilean etfs

https://www.df.cl/noticias/mercados/bol ... 83040.html

[41southchile]

That all needs to be converted to dollars. IVA is not income tax.

Really surprised at the amount of people that dont understand the difference between IVA and income tax that I have spoken to, especially gringos.

[41southchile]

The economies look much the same.... minerals and agriculture....

Like a chicken looks much the same as a sparrow.....
as they both have wings and feet, however they are definitely not the same bird.

[41southchile]

Highlighting this bit from the article:
There’s also evidence that taxes have room to go up. Chile collected 20% of GDP in tax revenue in 2017 versus an average 34% for countries in the Organisation for Economic Co-operation and Development, or OECD. Only Mexico collects less, at 16%. France collects the most, at 46%.

The OECD, oh yeah that aspirational club that Chile wants to continue to be a part of and compare itsself with, and wants outsiders to see them as a part of too.
Developed countries are not who Chile should benchmark itself with, it only creates false illusions. So apart from Mexico what are the other income tax rates within Latin America? But yeah there is probably room to increase income taxes here , but to 34 average like OECD? Dont think so

[Zenth]

Having a consumption tax and an income tax gets you coming and going. While the income tax can be graduated, the consumption tax cannot unless you tie a refundable income tax credit to it. Complicated as heck. The USA does it ostensibly to refund employment tax. It’s the area of the tax return audited most frequently due to false clams.
Next step is a wealth tax to soak up some more. Then, the inheritance tax. After all that, there will still be inequality.

[Kavo]

Well GST in Aus isn't applied to many basic items: Fresh food, meats, some medicine and some education courses.

How is the IVA applied here in chile?

I've seen many people here and in chile saying they can increase the Tax rates. But how will that play out the companies and individuals that will be affected by that? Generally people aren't happy about paying more tax.

[admin]

here you go you fucking morons. Explain how great your social revolution is to your father and mother over Christmas dinner, of an empanada.

3.5% contraction of the economy, just for October. what do you think November will look like, as companies were still deciding how to react to the protests?

1 million unemployed is being speculated about now.

Guess where most of that unemployment is going to be located?

same map, different stat.

[admin]

Well GST in Aus isn't applied to many basic items: Fresh food, meats, some medicine and some education courses.

How is the IVA applied here in chile?

I've seen many people here and in chile saying they can increase the Tax rates. But how will that play out the companies and individuals that will be affected by that? Generally people aren't happy about paying more tax.

IVA is pretty much applied to everything. It is a sales tax.

Income tax depends on income levels and type. people pay about 0 to 40%, with the vast majority of chileans paying nothing in income tax.

That is apart from corporate tax, etc.

chile also pays, traditionally, very little in property tax.

USA, often pays similar amounts to IVA in local and state sales tax, plus state income tax (most states), plus federal sales tax, etc.

but it is not so much how much they pay, but how it is spent.


so the whole thing is apples and rocks comparison.

[admin]

here you go you fucking morons. Explain how great your social revolution is to your father and mother over Christmas dinner, of an empanada.

3.5% contraction of the economy, just for October. what do you think November will look like, as companies were still deciding how to react to the protests?

1 million unemployed is being speculated about now.

Guess where most of that unemployment is going to be located?

same map, different stat.

what will this look like in a year or two?

same thing that happens everywhere this crap happens.

lots of the rich and upper middle class leave Santiago all together, or isolate themselves even more from the poor parts of Santiago.

with them goes job creation, and companies. central to south Santiago, etc, unemployment explodes; turning them in to real latin American ghettos. Valparaiso and concepcion are pretty much the same.

Money and companies basically abandoned the central region, whenever they can. They think long and hard about ever investing again in areas that have had protests.

on the upside, Chile will finally get decentralization as the central region loss becomes the other regions gains.

housing prices rise dramatically in places that the rich move to, insuring the poor and middle class can not ever touch it.

That is going to be the most expensive metro ticket the poor in chile ever bought; and don't let anyone bullshit you. the poor will pay for this. The powers that be, will make sure they are properly punished for their insurrection, the way they always do.

[admin]

The one I find suprising, is that there is anyone left that finds this surprising.

bunch of economist and politician seem like they have been MIA the last couple of months, or are simply pretending they are shocked.