Argentinas Milei lambasts plan to tax cash withdrawals as debate sparks online

A proposal to formalize the country’s economy via a tax on cash withdrawals and the elimination of other taxes sparked a fiery debate on Argentine social media, with economists, politicians, and even President Javier Milei weighing in. The project was created by Emmanuel Álvarez Agis, an economist who served as deputy economy minister during Cristina Fernández de Kirchner’s second presidential term. The uproar began after libertarian lawmaker Agustín Romo shared a 14-second clip of the economist speaking only about the cash tax.  The recording shows Álvarez Agis saying that the plan’s goal is to make consumers encourage businesses to go legit, using a hypothetical 10% tax to make his point: “I go to the ATM and want to withdraw AR$1,000, but only get AR$900.”  On Monday, Milei posted on X that Álvarez Agis’ idea consists of “stealing 10% of your income that you allocate to consumption” and called him a “thief” and “stupid.” The president is an anarcho-capitalist who posits the idea that taxation is theft. “They never think about reducing spending, only about how to collect more so that they can decide how much and what to spend your money on,” he added. Libertarian lawmakers and influencers followed suit, criticizing the proposal and insulting Álvarez Agis. Milei went as far as to compare the proposal to a stick-up. “What’s the difference between this proposal and someone waiting for you outside an ATM and stealing 10% of your money?” he said in another post on X. The president, however, did not comment on the other part of the project aimed at eliminating a tax on checks, which applies to checking account transfers. The proposal’s author explains Álvarez Agis’s proposal aims to formalize the economy via digital payment methods. In a follow-up interview in La Nación+, he said that Milei only commented on half of the project, adding that his plan does not increase the tax burden, only “redistributes it.”  “There is currently a tax on formality, which is the check tax,” he said. The economist went on to explain his logic, saying that he plans to tax the use of cash, which in turn should encourage consumers to pay with electronic means and businesses to formalize their operations.  Currently, retailers prefer to operate in cash in order to avoid taxes on their sales or profits. It’s not uncommon to find businesses all over the country that offer sizable discounts when paid with cash. “Argentina has a big problem with informality,” he said. “What this means is that those of us who are formal basically pay the taxes that those who are informal do not pay.”  According to online publication Visual Capitalist, Argentina is among the countries that use the most cash, ranking 24th in a list of 123 nations and relying on cash for 70% of its transactions. The site concludes that the poorest countries rely most on cash, reflecting limited banking infrastructure, and that “moderate economic development doesn’t automatically mean digital adoption.”