The fiscal looting of Latin America's elites: the real cause of poverty

When neoliberal economists appear on television to justify raising the value-added tax (IVA) on food or cutting public health budgets, they always repeat the same worn-out line: "there is not enough money in the treasury, and the state spends beyond its means."

What these corporate advisers shamelessly conceal is that Latin America does not suffer from a scarcity of wealth, but from a systematic fiscal plundering carried out by local elites in collusion with offshore financial centers.

Every year, more than $320 billion in private capital secretly leaves the region for tax havens in Panama, the Cayman Islands, or secret accounts in Miami and Switzerland. That astronomical figure amounts to no less than 6.3% of Latin America's entire GDP. It is money generated by peasant labor and domestic economic activity that escapes without paying a single cent in income tax, depriving our states of the resources indispensable for building railway networks, modern hospitals, and drinking water infrastructure.

To make matters worse, Latin America's tax systems are among the most unequal on the planet: they levy regressive taxes on popular consumption while granting exemptions and special favorable regimes to big banking and mining capital.

The solution to fiscal crises does not lie in continuing to tighten the belt of the popular sectors who barely make it to the end of the month, but in enacting progressive tax reforms that pursue the evasion of large fortunes and compel multimillionaires to contribute what society is rightfully owed.