Key Takeaways:
- The column rejects the claim that a 2027 election win would make 2028 Argentina’s best economic year, arguing a market turn cannot wait until Dec. 11, 2027, and that privatizations have been too few while the Central Bank and security forces hold more capital.
- It cites official GDP down 1.72% in 2024, private real wages down 3.6% from 2023 to July 2026, disposable income down 22–31%, tariffs up as much as 944% against CPI of about 329%, and treats the 2027 tax-take drop from 21.2% to 19.2% of GDP as dependent on an implausible 4% growth.
- The author’s unused alternative is free union formation, labor deregulation, and returning subsidy-linked taxes—not a finding that those steps were legally or politically available.
The president has said that “If we receive the favor of the Argentines next year, as of December 11, 2027, the speed at which the reforms will take will be unique and unrepeatable in the world. If we win in the Presidential elections… ” 2028 will be “the best economic year in Argentine history”.
But it is logically (and Logic is a science) impossible to think that those who initiated actions that have gone in the opposite direction and justified that direction, suddenly turn 180 degrees, without recognizing that they were going in the opposite direction. If recognized, the change should be implemented immediately, not from December 11, 2027.
Now, let’s see what we mean by opposite direction.
Moving towards a market economy means leaving economic activity increasingly – the faster the better, but what matters is the direction not the speed – in the hands of the market and less and less in the hands of the state. This implies, first, more resources (lowering the monetary tax burden), more decisions (deregulation) and more properties (privatization) in the hands of the market.
Privatizations and liquidations of properties have been very scarce so, ironically, the result is that the State has been enlarged. Among so many other agencies, the Security and the Armed Forces today have more capital and, contrary to the discourse, today the Central Bank is stronger, larger, has reserves that far exceed what was collected with the few privatizations.
From the point of view of public employees, although there was a very poor reduction in absolute terms, private employment fell even more, ergo, today there are more public workers for every private one, and this is what counts. In short, contrary to what is said, during the current administration the State clearly enlarged from all angles.
As for deregulations, in the best of cases they have been very poor, without any important incidence beyond some related to foreign trade, which has allowed an advance in exports.
As far as the tax burden is concerned, it has undoubtedly increased sharply, and this is what has caused the fall in GDP – of 1.72% according to official data – in 2024 and the very weak performance that follows. Blaming the “inheritance received”, the typical argument of all politicians, for this fall is not serious: a bad inheritance implies that you start from very low, even in debt, but not that you continue to fall, it is pure logic.
Let’s keep in mind that the real fiscal pressure – the way in which the State withdraws resources from the market – is not only taxes but also inflation and exaggerated interest rates due to state borrowing and other regulations such as reserve requirements.
As soon as it took office, this government raised some taxes, but this is not the most serious thing. With the taxes of the citizens, the subsidies were financed plus the bureaucracy that administered them. So, when these subsidies were removed, those taxes had to be returned and there is the social benefit of the reduction, not elsewhere. That is to say, the gain of eliminating consists in the fact that the citizen is returned the taxes equivalent to the increase in tariffs that occur plus the part with which the bureaucracy was financed.
This did not happen; those taxes were not returned. It is equivalent to having them returned, leaving the situation at zero, but then causing a sharp increase on the other hand to maintain the same collection.
hus, from 2023 to July 2026, real wages in the private sector fell by 3.6%, but disposable income plummeted by between 22% and 31%, as service tariffs accumulated an increase of up to 944% since December of that year, while the official CPI advanced by around 328.57%.
Since then, beyond the official propaganda, the tax pressure (keep in mind that the citizen receives not only the national but also the provincial and municipal ones) has continued to grow and everything indicates that it will continue to increase.
The 2027 Budget presented by the Government estimates a supposed reduction in the tax burden, which would go from 21.2% of GDP projected for 2026 to 19.2% in 2027. This decrease is mainly explained by the assumed GDP growth of 4%. Total tax collection is projected at 14.8% of GDP, with a nominal increase of 30.6%, exceeding the expected inflation of 18% and social security resources would add up to 4.4% of GDP, with a growth of 19.6%, almost in line with the CPI, and will be affected by the Labor Assistance Fund (FAL).
This figures are not entirely clear, anyway the key to meeting these projections lies in the GDP growth rate of 4%, which is not credible given the strong weight of the State; with which tax revenues will surely be lower than estimated, forcing – given the effective philosophy implicit in the current administration – a real increase in the tax burden.
What should have been done? Dismantle the corporatist scheme in force in Argentina, which has not been done for obvious ideological reasons.
In the first place, the union structure should have been dismantled by completely freeing the workers so that anyone could create and form a union, to which those who wanted to join and contribute, or not. This has most likely not been done for ideological reasons, due to a lack of knowledge of how freedom works: surely, it was believed that freeing up activity, with the growth in the number of unions, would increase social conflict, when the truth is quite the opposite.
When freed, the political force of the trade unions would be atomized, transforming the unions into true mutuals for the benefit of their members, but losing their political power, which is very heavy in Argentina. And this weakening would mean freeing up a strong obstacle which would have allowed the government a very profound general deregulation, starting with the labor laws.
Thus, full employment and growth could have been achieved, which would make possible a sharp cut in social spending, since, according to the government, “the set of expenditures aimed at directly assisting people covers 74.6% of the total National Budget 2027”, and this would have allowed a forceful tax cut, and thus continuing in a strong and exponential virtuous circle.
