Santos May Raise Wealth Tax to Finance Colombia Rains Recovery

[Judi Lynn]

Santos May Raise Wealth Tax to Finance Colombia Rains Recovery
December 24, 2010, 3:43 PM EST
By Helen Murphy

Dec. 24 (Bloomberg) -- Colombia’s President Juan Manuel Santos said his government is considering extending for one year and broadening a tax on high-income earners to help pay for the damage caused by the worst rains in 30 years.

The tax, which currently is levied on people with assets of more than 3 billion pesos ($1.5 million), may be extended to those with more than 1.5 billion pesos, Santos said in an interview with RCN Radio. The tax was scheduled to expire in 2014. The government is not considering raising the value-added tax, Santos said.

Santos is looking to raise funds to help victims of rains over the past two months that have killed at least 238 people, left thousands homeless and damaged about 1 million hectares (2.47 million acres) of farmland.

The government estimates flooding may have caused 10 trillion pesos in damage and could hurt economic growth and fuel a short-term surge in food prices in the coming months. Colombia yesterday lowered its 2010 growth estimate to 4.5 percent from 5 percent after third-quarter growth came in under expectations.

http://www.businessweek.com/news/2010-12-24/santos-may-raise-wealth-tax-to-finance-colombia-rains-recovery.html

[naaman fletcher]

1. excellent policy choice

don't you agree?

[Bacchus39]

2. what about ruling by decree???

I mean I am sure there are several choices but a couple of examples are: declaring rule by decree using the tragedy as an excuse to obtain more power, or raising taxes on the wealthy to pay for necessary rebuilding. I tend to agree with the latter, but just throwing out the other option for comment.