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Chile passes bill to tax the super rich in bid to alleviate poverty

CHILE has passed a Bill to tax the super-rich, whose fortunes have continue to increase while the pay of low and middle-income families has plummeted during the coronavirus pandemic.

The landmark legislation was passed by parliament on Wednesday and the revenue it generates will be used to finance a basic emergency income.

“In our country, 2.3 million middle-class families have become vulnerable, while unemployment increases, income falls and the cost of living increases,” said the Bill’s author, legislator Raul Soto.

“Yet the eight richest people in the country, including President [Sebastian] Pinera, increase their fortune by more than 70 per cent according to Forbes.” Forbes is a US business magazine that publishes an annual list of the world’s richest people.

The legislation was passed by 105 votes to 18, with 26 abstentions, and will now be sent to a number of commissions for further negotiations and possible amendments. It requires the approval of Chile’s upper house to become law.

While the Bill has been widely welcomed by Chileans, many have expressed concerns that a one-off tax on the super-rich does not address the long-standing issue of emergency income.

Poverty has grown in Chile since Covid-19, with some 7.8 per cent of the population living on less than $5 (£3.60) a day, up from 3.3 per cent before the pandemic. 

The country has been rocked by mass protests against structural inequality, to which the security services have responded brutally, leaving hundreds injured amid allegations of rape and torture in custody.

Demonstrations have been curtailed by the coronavirus crisis, but anger remains simmering below the surface.

Hunger has risen sharply in Chile, with 19.4 per cent of households suffering food insecurity, according to the Ministry of Social Development. Many of the poorest in society lack basic services such as water and electricity.

Last October, 78 per cent of the electorate voted in favour of a new constitution, to be written by an all-citizen convention.

The charter will replace the 1980 constitution, which was drafted under General Augusto Pinochet’s brutal dictatorship and approved in a rigged national plebiscite.

Chileans hope that the new constitution will help address some of the structural inequalities enshrined in the Pinochet-era document, which promoted the neoliberal, free market economic model and widespread privatisation of public services.

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