By Michael Soltys, Senior Editor

Buenos Aires Governor Daniel Scioli’s tax package, railroaded through both houses of the provincial legislature, is bad news for almost everybody except his taxmen, hitting both rural and urban households as well as international trade. No less than 10 percent of the population will be directly affected by the new levies on urban and rural property, car licences and port operations alongside an inheritance tax and that percentage is but the tip of the iceberg for side-effects. Nor will the pain be equally spread — while urban property rates will rise 20 percent for houses valued at over 100,000 pesos, the rural equivalent stands to increase 30-130 percent and while the new port charges demand six pesos per ton loaded as against 18 pesos per ton unloaded, it is nevertheless the farmers who feel especially aggrieved with this new cost burden because provincial ports function far more as bulk grain export outlets than as the recipients of any consumer luxuries.

Having abused an expiring legislative majority to add to so many people’s troubles in a year of economic crisis, Scioli nevertheless falls short of solving his own fiscal problems because this new package will at best close around a quarter of an eight-billion-peso deficit. Yet he evidently feels that punishing his province in general and its agriculture in particular is the path of least resistance, as compared to disputing the central government’s insistence on placing its own finances ahead of federal needs. The damage being done to provincial finances goes beyond being shortchanged by federal revenue-sharing — increasingly the national government seems to be finding the answer to its fiscal problems to lie in the “inflation tax” (continually denied by the INDEC statistics bureau’s data), which is basically the central administration’s gain and the provincial governor’s loss because while the former benefits from higher sales tax revenues, the latter has much larger payrolls to satisfy.

Anything affecting Buenos Aires province (which houses almost 40 percent of Argentina’s population) is already serious enough but virtually all governors share Scioli’s dilemmas — thus Córdoba has already gone down his road of upping taxes while Santa Fe is probably waiting to have this Sunday’s local elections out of the way (needless to say, both are important farming provinces). The situation invites a tax rebellion but why is there not first a rebellion against a federal revenue-sharing system which creates this cruelly abused dependence on the central government?