Tax Rebellion in Argentina (and PA)

Posted: Apr 01, 2008 11:09 AM
Last year, I traveled to Buenos Aires and, among many other tourist destinations, I visited the "Madres de la Plaza de Mayo."  This is the spot right across from the "Pink House" where the mothers whose children "disappeared" during the military dictatorship still march in protest every week. 

But more recently, though, the location has been one of many sites used for  demonstrations against increased export taxes.  As : Mary Anastasia O'Grady writes in The Wall Street Journal:
Farmers rebeled earlier this month when the government announced an increase in export taxes on agricultural products. Claims that the government's new "retention" rates -- aka export taxes -- are close to an expropriation are not without merit.

... In response to the tax increases, farmers have blocked roads in some 300 locations around the country, pledging not to allow their goods to reach markets. The effects of the action have been felt in the capital, where demonstrators have taken to the streets in sympathy for the farmers and against what they say is government arrogance. The strike is now in its third week.

Mrs. Kirchner says the tax increase is a redistribution mechanism, suggesting that growers and ranchers have to be forced to share more of their good fortune with others. But the greater motivation behind the export-tax increase is inflation.

This government, it seems, will do just about anything to reduce inflation except the one thing that would solve the problem: Let the peso strengthen.

I would think the best comparison for Argentina would be Jimmy Carter’s attempts are price controls in the late 70s.  Price controls did not work in Roman times and they still do not work today. 

Of course, tax rebellions are nothing new.  Interestingly one of the tactics the farmers are using is blocking roads.  Today, Pennsylvania truck drivers are striking and protesting against high gas taxes.  Some have speculated they may also attempt to block roads ...