THE GREAT SILENT PLUNDER

When the Left Decided to Confiscate the Future of Workers and Small Businesses

THE GREAT SILENT PLUNDER
When the Left Decided to Confiscate the Future of Workers and Small Businesses
By Dr. Nelson Jorge Mosco Castellano

The perverse economic and social effects of left-wing policies endure and are difficult to reverse, because of their savage redistributive fundamentalism and the pressure of the corporatisms they encourage, especially from communist trade union leaderships.
Perhaps the most perverse in our country since they took office in 2005, and earlier in the Municipality of Montevideo, is the fiscal explosion that desperately seeks to extract resources from society, without measuring the damage to the sustainability of business productivity, and particularly to work.
That impact is mortally destructive of the social fabric, particularly in the middle and lower economic sectors of society, since they directly suffer the deterioration of purchasing power and the breaking of the ladder of social advancement.
In a society with a small productive market of supply and demand, taking away the resources that sustain its equilibrium is equivalent to killing it.
This has happened, and continues to happen, in all those economic areas in which the very foundations of employment, training for it and, consequently, production have been requisitioned.
Reversing a fiscal decision that distributes resources as handouts and subsidies, perks and sinecures, multiplied public positions and corrupt practices, is extremely difficult for anyone who wants to return to the rational, sustainable axis of the human economy.
There are promises that are written with the ink of hope but carried out with the cold precision of a razor blade.
Under the cloak of “distributive equity” and technocratic modernity, the tax reform led by Danilo Astori was sold as an act of strict social justice.
The official narrative was seductive: an income tax that would finally make those who have the most pay, supposedly offset by relief in indirect consumption taxes, such as VAT, which suffocated the most vulnerable.
But reality, implacable and devouring, shattered the mirage.
That tax design was nothing more than the founding act of a fiscal hell, the systematic beginning of taking from the Uruguayan worker the sacred fruit of his effort and his minimal capacity to save.
Also, just in case, the public pension system was consequently confiscated, since contributions became increasingly burdensome.
From there to the multiplication of informality there was barely a single step.

The great lie of relief: Promising in order to plunder

The Personal Income Tax (IRPF) was implemented under the solemn promise that the burden of VAT would fall in order to relieve those confiscated by that tax of the cost imposed on their capacity to consume.
The citizen believed. He trusted that the State and its left-wing government were sensible, rational and, in their infinite democratic and republican benevolence, thought that the scales would be balanced.
It was not sustainable to impose a deduction on wages while at the same time maintaining a revenue-raising tax on daily purchases.
The promise vanished into thin air. VAT never truly or structurally fell.
The State governed by the Left, far from choosing between one model or the other, kept everything: it left intact the most regressive tax on consumption and, on top of that, added an implacable machinery of extraction from wages.
It was the birth of double punishment: the individual is punished for what he earns when he gets up every morning and goes out to see whether he can sustain himself by working, and he is punished again, harshly, when he goes to the market to buy what is indispensable for subsistence.

The voracity of the beast: When reality surpasses cynicism

The figures of the dispossession reveal the true magnitude of the tragedy.
What was timidly projected and solemnly promised on paper as moderate revenue —barely some 450 million— quickly turned into a confiscatory tsunami of more than 1.45 billion dollars that flooded the public coffers.
Not from “income,” because that was not where the tax struck; but from wages. What was indispensable for living from the worker’s effort was not deducted. Practically, only the minimum housing payment was deducted, while he also had to pay prices with VAT that was never truly reduced.
That monumental gulf between what was calculated and what was collected was not an accounting miscalculation; it was the X-ray of the insatiable voracity of the redistributor.
It was not the richest who were affected; it was formal wage earners.
Millions and millions of pesos that should have remained in the pockets of working individuals, feeding family savings, building their own capital or allowing them to plan a future with dignity, were torn out of the private economy.
The citizens’ money became the spoils of war of a thirsty bureaucracy.

The punishment of merit: Working more to sink deeper

The most perverse aspect of this scheme is how it destroyed the foundations of merit and personal progress. It created the dilemma of working formally in order to live, or surviving off the books. Daring to accumulate work, to have more than one job, was suicide.
Accumulating essential resources to barely improve the family’s quality of life was considered income.
In post-reform Uruguay, the rules of the game condemn effort, confusing the worker with the rentier.
As the worker works himself to the bone, seeks to improve himself, works overtime or climbs the ladder through talent and sacrifice, the confiscatory progressivity of the IRPF acts like an invisible but lethal anchor.
The more nominal income grows, the more aggressive the State’s bite becomes.
The result is heartbreaking: purchasing power evaporates, the capacity for basic savings is reduced to ashes, and the worker discovers with bitterness that the system punishes him if he tries to prosper.
He must settle for a low or requisitioned formal wage, and a high tax on what he consumes that is also confiscatory of his purchasing power.
Progress ceased to be a reward and became a crime against income penalized by the public treasury.

The factory of exclusion: 30% exposed to the elements

But the cruelest blow of this tax architecture was not limited to punishing the formal worker; its oppressive weight transformed the country into an implacable factory of informal workers and poor people without the capacity to consume.
The Uruguay of the “expensive country” was built.
Caught between suffocating social charges, extremely high labor costs and a system that squeezes both employer and employee, thousands of Uruguayans were pushed to the margins of the employment system.
Today, almost 30% of the labor force survives in the most absolute informality, condemned to institutional exposure: without labor rights of any kind, without protected health coverage, without pension contributions or prospects for a dignified old age.
Fiscal voracity, far from protecting the weak, destroyed the incentives for formalization and created a legion of disposable citizens, deprived of every safety net.

Where did the loot go?

And the great question that echoes like a ghost through collapsed hospitals, gutted public schools and high schools, and gray roads is: where did all that money go?
The billions extracted through taxes and sweat did not translate into better public services.
There is no elite healthcare system, no education capable of competing with the first world, and no ironclad security.
The colossal loot simply served the Left to feed an ogre State, obese and full of bureaucratic fat, an inflated political apparatus that grows at the expense of the suffocation of the productive sector.
Astori’s tax reform reformed nothing for the better; it institutionalized plunder, cronyism, nepotism and “comradeship.”
It turned the State into a parasitic partner that takes the lion’s share of the poor person’s consumption without risking a cent, leaving a large part of society in informality and the formal worker trapped in a fiscal labyrinth where saving is a forbidden luxury and the future a privilege confiscated before birth.

Fiscal pressure and work
Savings and formal employment
State and redistribution

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