A landmark study on Latin American taxation finds that Argentina's poorest households surrender 37% of their income to the state — while the wealthiest 10% hand over just 25%. The system is upside down, and fixing it may require taxing fortunes directly.
Argentina is often described as a high-tax country, and in aggregate terms, that is broadly true. Its tax burden sits at 27.8% of GDP — above most of its regional neighbors, though still below the OECD average of 34%. But aggregate figures obscure a more troubling reality: who actually bears that burden is profoundly unequal, and the inequality runs in the wrong direction.
According to research presented at the Universidad de Buenos Aires (UBA) by Vicente Silva, a senior advisor at the International Tax Observatory (ITO) — an organization affiliated with the Paris School of Economics — Argentina's tax system is structurally regressive. That is, it extracts a larger share of income from those who earn less.
The numbers are stark. The poorest households pay an effective rate of 37% of their income in taxes. Middle-class families pay around 29–30%. The top 1% of earners also pays roughly 30% — essentially the same as the middle class. And the top 10%, the merely wealthy rather than the ultra-rich, pays just 25%. In a system meant to fund public goods, those who benefit least from those goods contribute the most.
VAT: the invisible burden on the poor
The mechanism driving this inversion is not complicated. Argentina's tax system relies heavily on VAT (the Impuesto al Valor Agregado, or IVA), which accounts for roughly 40% of all tax revenue collected. VAT is a consumption tax: every time someone buys food, medicine, clothing, or pays for transport, a share goes to the state.
The problem is that low-income households spend virtually all of their earnings on basic consumption. As Silva explained at the UBA presentation, when income is almost entirely converted into consumption, a very large proportion of that income is captured by VAT. Wealthier households, by contrast, consume only a fraction of what they earn — the rest is saved or invested — so VAT weighs far less on them relative to their total income.
This is not a design flaw unique to Argentina; it is the structural weakness of any VAT-heavy system. But in Argentina the effect is amplified because the counterweight — income or wealth taxes on the rich — is exceptionally weak. While VAT contributes 40% of tax receipts, Bienes Personales (the personal wealth tax) contributes just 1.3%.
Where the ultra-rich disappear from the tax base
The picture becomes more extreme at the very top. While Argentine-specific data on the 0.01% is not available, comparable research from Brazil and Chile — presented in the same ITO report — shows that the wealthiest hundredth of a percent in those countries pays effective tax rates that are roughly half those of the general population. Silva and his colleagues have no reason to believe Argentina is an exception.
The mechanism here is different from VAT avoidance. At this level of wealth, the primary strategy is to retain profits inside corporations. As long as earnings are not distributed as personal income — as dividends or salaries — they are largely invisible to income tax systems. The ITO study notes that among the ultra-wealthy, income tax is "practically not collected" because taxable personal income is structurally suppressed.
María Julia Eliosoff, director of economic affairs at the Friedrich Ebert Foundation in Argentina (the policy arm of German social democracy), adds another layer: the documented use of corporate credit cards for personal expenses, and the deployment of financial engineering to shift taxable income to lower-tax jurisdictions. These are global strategies, but they are particularly effective in Latin America, where institutional capacity to track cross-border wealth is limited.
Six people, $20 billion, and a free ride on public infrastructure
The ITO report identifies six individuals in Argentina whose combined fortune exceeds $20 billion and whose wealth grows at roughly 8% per year. They are Marcos Galperin (Mercado Libre, ~$7.2bn), Paolo Rocca (Techint, ~$7.3bn), Alejandro Bulgheroni (Pan American Energy, ~$5.1bn), Eduardo Eurnekian (Corporación América, ~$4.8bn), Eduardo Costantini (Consultatio, ~$1.3bn), and Delfín Carballo (Banco Macro, ~$1bn).
Silva's framing of this is deliberate: those fortunes, he argues, were built on public roads, public ports, and the human capital trained in public schools and universities — all funded by the taxes of everyone else. Yet neither Galperin nor Bulgheroni is subject to Argentine tax jurisdiction: both are residents of Uruguay.
A regressive turn under the current government
The ITO study situates these figures within a recent political shift. Since the Milei administration took office, Argentina has moved to consolidate its fiscal accounts primarily through cuts to public spending — including social programs — while simultaneously expanding exemptions and tax relief for higher-income groups. The report notes this as a significant directional change in tax policy.
It is worth stating plainly what that means in practice: in a country where teachers, police officers, and hospital workers are being paid late or not at all, and where public universities are fighting for basic operating funds, the effective tax burden on wealth has been reduced.
A proposed solution: a minimum tax on extreme fortunes
The ITO's proposal, designed for the Latin American context, is a minimum wealth tax of 2% on assets exceeding $100 million. It would function as a floor rather than an additional levy: if an ultra-wealthy individual already pays taxes — through income, dividends, or other instruments — that reach or exceed that 2% threshold, nothing additional is owed. The charge only applies where existing tax payments fall short of the minimum.
The design is intended to be robust to the usual avoidance strategies. Because it is calculated on total declared wealth rather than on reported income, retaining profits inside a company does not reduce the liability. The aim is not punitive but corrective: to ensure that those at the very top of the distribution contribute at least a meaningful floor to the public systems their business models depend on.
The ITO report is explicit that the question for Argentina is not whether to reform its tax structure, but how to design a reform capable of reaching where conventional instruments cannot.
Sources: International Tax Observatory (ITO) / Paris School of Economics, report presented at the Universidad de Buenos Aires, 2024; Friedrich Ebert Foundation (Argentina); OECD Revenue Statistics.
