09/05/2014
Mauricio Rojas. Director of Academia Liberal de la Fundación para el Progreso (Chile)
A few days ago The Wall Street Journal (04.05.2014) published an article entitled 'Assault on the Chilean Miracle'. Its subject was the drastic tax reform proposed by the new president, Michelle Bachelet, which could raise the company tax from 20% to 35%. This added to the effect of a rise of the income tax from 20% to 25% and the elimination of the tax exemption on reinvested earnings. Thus Chile is moving counter-current in a world where the trend, especially in small and open economies, is to lower taxes in order to attract investment.
The socialist president thus initiates the destruction of the foundations of a period of remarkable growth and progress in Chile. She does so, moreover, with all the characteristic brash populist demagoguery, claiming that only the rich will pay, as if such an assault on investors were not to impair job creation and therefore, the development of real wages and the fight against poverty and inequality.
But even more serious than this economic dis-criterion is its purpose, which is simply to promote an educational reform the aim of which is the growing nationalisation of Chilean education. In a few days the project banning profit will be submitted to parliament, i.e., banning entrepreneurship on education receiving any state funding. This is a direct attack on the many concerted schools of all levels where approximately half of Chilean children are educated. This way socialism seeks to do what it has always sought everywhere: to take over the training of new generations to shape them to their own image and likeness. That this could destroy this education system which, with all its shortcomings, is the best in Latin America according to PISA measurements, seems to matter little to the current president.
And if that were not enough, Chilean socialism has set to destroy the foundations of liberal society by proposing a quota system or "positive discrimination" in education and politics–to be followed by other activities–which will set Chile on the path of a society where individuals are not judged according to their merit but because they belong to a particular group.
Bad times for Chile, but nothing new under the sun. Socialism does not disappoint, what does disappoint is the people who allow themselves to be duped by their demagogy and decide to choose it.