Chilean Opposition Compromise on Tax Reform, and Moral High Ground

EspañolIn Chile, the ruling New Majority Party and the opposition have reached a so-called cross-protocol agreement on tax reform, one of the promises of the Michelle Bachelet administration.

Finance Minister Alberto Arenas has described the outcome as an “historic agreement for Chile.” Although the opposition took steps to prevent this reform from harming the most vulnerable, it is sure to bring repercussions sooner or later.

It has become obvious that those who purport to defend the ideas of liberty have decided to score — as we call it in soccer — an own goal once again. With this strategy, unfortunately, they have given up on the principles were their genesis and which have shaped the current opposition.

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An example of this was the surrender to reasoning that undergirds tax hikes: the argument of “social justice” and a diverse array of allegories against profit. These prepositions that have become part of the Chileans’ everyday vernacular, and they imply a sustained increase for the power of the state and its bureaucracy, while regular citizens have less autonomy.

The adoption of someone else’s banner, with instrumental, electoral intentions, is harming the level of political discourse yet again. Fundamental concepts for prosperity and open competition, which improve the quality of life, growth, and progress of a country, have been undermined.

Thus, the Chilean political landscape has descended further from market liberalization and deregulation. These policies, which increase competitive forces and innovation, are taking a backseat to favor the politically connected.

Economic liberalization has had so many positive results in many other countries; yet we are turning our backs on it. The privatization of the taxi system in Ireland, in the early 2000s, lowered costs substantially and allowed users more transportation alternatives. In Monaco, there are no rent controls, and today the country boasts the lowest levels of poverty in the world. Meanwhile in New Zealand, the lack of agricultural subsidies has allowed agriculture to account for two-thirds of exports.

And in Chile itself, the liberalization of the sanitation system has led to 99.9 percent of Chile’s urban areas to be able to provide drinkable water in a cost-effective manner.

Now is the time for us to sharpen our focus, and take the helm of the opposition movement. We must remember the celebrated quote from the economics Novel Laureate Milton Friedman. As he rightly pointed out, “a society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”

Translated by Mariana Navas and Laura Weiss.