- Created: Thursday, 20 August 2015 13:30
- Written by Alvaro Michaels
Never before in the history of Ecuador has the propertied elite had to concede so much to the demands of the poor. Public sector spending increased from 21% of GDP in 2006 to 44% in 2013. This is part of the Citizens’ Revolution led by President Correa and the Alianza PAIS. Spending on people has infuriated the wealthy and they want to remove the government and seize back their loot. They control most of the media and attack the government’s programme in every way, including violent demonstrations.
Taxing the rich
On 1 June 2015, Correa announced two new tax bills. One, the Wealth Redistribution Law – a progressive inheritance tax affecting the richest 2% of Ecuadorians – starts with a 2.5% tax on homes costing between $35,400 and $100,000. The highest marginal rate would be 47.5% for the family but up to 77.5% for other beneficiaries. The second bill is a real estate capital gains tax of 75%. They undermine the power of 100 elite families who have dominated Ecuador for centuries. Wealthy landowners and property developers are furious, headed by the Mayors of Quito and Guayaquil, Mauricio Rodas and millionaire banker Jaime Nebot respectively, plus the Prefect of Azuay, Paul Carrasco.