When Colombia’s new leftist president, Gustavo Petro, unveiled a plan to impose a wealth tax on the rich just hours after being sworn in, the alarm bells rang only so loudly in the fashionable neighborhoods of Bogota and Medellin.
This sort of tax is nothing new here. The country has had one, on and off, for decades. And besides, at first blush, this one looked an awful lot like the old ones: a 0.5% tax rate on assets above about $600,000 that would climb to a 1% rate on assets over $1.1 million.
But a closer review reveals a critical difference that makes this tax markedly more potent, so much so that it could — in conjunction with another Petro proposal in the works — drive up taxes on the wealthiest by about 200%. The bill would force the rich to declare their assets at current value, unlike the old law, which allowed them to report assets at their original purchase price.
