The Kirchners, Taxes & Wealth Redistribution

Politicians worldwide often are accused of failing to practice what they preach. So it should come as no surprise that Argentine politicians, too, are also sometimes accused of such hypocrisy. On Sunday La Nación, the country’s No. 2 circulating newspaper, published an article indicating that former president Nestor Kirchner and his wife and successor, Cristina Fernandez, are guilty of practicing precisely the opposite of what they preach.

According to the article, which reportedly examines federal documents, Nestor Kirchner last year earned 5,264,105 pesos ($1.7 million). The money came from rent collected on properties owned by the former president. The properties, which include 16 houses, two retail stores, 13 apartments and six pieces of land, are reportedly administered by the ex-president’s son, Máximo Carlos Kirchner. In 2007 Nestor and Máximo paid taxes totaling a combined $4,461 on that $1.7 million of income, according to La Nación.

The Casa Rosada press office did not answer calls by The Argentine Post seeking comment.

As cited by the daily, federal law requires individuals to pay a 6% income tax on property rental income over 1,200 pesos a month. At that rate, if this law is indeed applicable to him, Kirchner should have paid taxes totaling $102,000 last year, or 2,187% more than he and his son combined actually paid. Cristina Fernandez, meanwhile, who was a Senator before becoming president in December of 2007, paid taxes totaling $416 for all of last year.

The combined taxes paid by Nestor, Cristina and Máximo in 2007 amounted to roughly $4,877, or about 0.28% of Nestor Kirchner’s total declared income.

Cristina declared income totaling $3,960 in 2007, according to La Nación. A separate story by the newspaper reported in June of 2007 that Congress had passed a bill raising legislators’ salaries to about $2,970 a month. This was a raise of about 16.5%, meaning that prior to this, the average senator made about $2,550 a month. This is about 750% more than what Fernandez declared.

As noted, The Argentine Post was unable to immediately contact a presidential spokesman to confirm La Nación’s article, so it is hard to know what explanation might exist for the discrepancy between what the Kirchners paid in taxes and what they apparently owed.

The comparatively minor amount of income tax apparently paid by the First Couple sharply contrasts with their declared plans to use the “redistribution of wealth,” implemented through progressive tax policies, to reduce social and economic inequity in Argentina. When farmers recently protested the government’s decision to raise export taxes to as high as 45%, Fernandez justified the move by saying it was necessary to “redistribute wealth from those who have the most to those who have the least.”

Ironically, if La Nación’s article is correct, this philosophy of redistribution does not apply to the Kirchners, who are wealthier than 99% of Argentines.

Link: La Nación Story (in Spanish)

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