Since June 8, much of international media focusing on Ecuador has highlighted the street protest by the right wing against President Rafael Correa and the Citizens’ Revolution movement. The protest was triggered by the introduction of two proposed laws meant to continue the goals of the popular government to redistribute wealth to the country’s poor and fund much-needed social programs.
The new Inheritances and Capital Gains Tax Laws were presented by the Executive Branch to the National Assembly for approval in early June, and it triggered protest of several hundreds demanding an ouster to Correa. A month has passed since the protest began, and President Correa has already stated that the destabilization efforts meant to achieve a “soft coup” in Ecuador have already been interrupted.
Summary of the Inheritances and Capital Gains Tax Laws
As stated by the government, the Inheritances and Capital Gains Tax Laws would affect less than 2 percent of the population. The following are some of the provisions of the proposed law:
1) The goal of the new tax laws are not for collection of funds for the State, but the redistribution of wealth for the people.
2) The calculation of inheritances taxes has not been done since 1927, the year the regulation of these taxes was to begin being managed by the State.
3) The law creates mechanisms to prevent the fiscal evasion of taxes on inheritances.
4) The following percentages will be used in all cases—includes direct inheritors (sons, parents, grandparents) and other benefactors—which will determine the tax of 2 percent for inheritances worth $35,400 to $70,800 and increase progressively, according to the ranges established by the ceiling and floor of every range.
5) The second recorded category consists of inheritances between $70,800 and $141,600, which will be taxed 7.5 percent. The next category is between $141,600 and $283, 200, taxed at 17.5 percent. This is followed by the category of $283,200 to $566,400, taxed at 32.5 percent. Finally, inheritances over $566,400 will be taxed at 47.5 percent.
6) The final category, eliminated in response to the protests, was to be taxed at up to 77.5 percent for inheritances worth over $849,600.
(Info and data translated from the site TeleSUR.ne)
President Correa has made it clear that the goal is to target the rich. To provide an example of corrupt thievery, President Correa told how the wealthy commonly deposit their capital in tax havens (similar to the countless millionaires and billionaires who hide their money in tax-free islands or Swiss banks) and place no date of birth associated with the depositor so that any inheritor can claim the inheritance tax-free due to the technicality that the lack of date denotes no transfer of capital.
Unlike in the U.S., where this practice is ingrained and encouraged by all levels of the political establishment, progressive, nationalist and revolutionary governments have taken strong stances against the bleeding of national resources by the neo-liberal bourgeoisie and well-to-do who would love to return to the time that their and their children’s pocket books could continue flowing with opulence while the masses suffered extreme poverty.
Left-wing rhetoric masks right-wing populism
In what has become an all too common tactic by the right wing in Latin America, from the protest against Brazilian President Dilma Rouseff to the violent anti-government marches in Venezuela, the right-wing has picked up “left-sounding” slogans like “Down with the Dictatorship!” “Democracy Now!” “End to the Corruption!” and “Correa Out!”
The classless character of such an approach to the social movements, whether from the left or the right, allows for a wide international audience, especially by pro-imperialist media who consciously avoid contextualizing the struggles in the different countries where progressive and radical governments have taken office in capitalist states. This is a tactic similar to those used in Ukraine, Libya and Syria where well-meaning but naïve individuals were swept into joining the right-wing demands for changes in government while completely avoiding the question, “What is the class character of the government that will replace the current one?”
Unfortunately, in Ecuador, right-wing populism is further strengthened by ultra-left forces like the Frente Unitario de Trabajadores (The Unity Workers Front) and the CONAIE—Confederación de Nacionalidades Indígenas del Ecuador (Confederation of Indigenous Nationalities of Ecuador), both of which represent large and influential sectors of workers and Indigenous groups.
These forces have pushed for a program independent of what they consider the moderate and pro-capitalist one of Alianza Pais (Alliance of the Country Party) and the Citizens’ Revolution movement. Maintaining a revolutionary and independent program in the progressive social movement of Latin America is one thing. But during the most recent wave of protest, these groups have found themselves chanting and raising the same demand as the right wing: “¡Correa Fuera!”
Of course, the international pro-imperialist media, as well as the national and regional capitalist media, were more than happy to point out that many workers and Indigenous groups had joined the right-wing opposition in calling for the ouster of President Correa.
It is important to note that two major workers’ and Indigenous groups, the “CUT—Central Unitaria de Trabajadores” (Central Unity of Workers) and the “FENOCIN—Conferederacion Nacional de Organizaciones Campesinas, Indígenas y Negras (National Confederation of Farmer, Indigenous and Black Organizations) have come out clearly in support of President Correa, while maintaining principled criticisms of his administration. These are only two of the many social movement forces who have backed President Correa during this time of right wing destabilization, which threatens the significant progress made by poor and working people in the past eight years.
The Citizens’ Revolution, eight years’ strong
There are plenty of reasons why the right wing would love to see an end to Correa’s government. In 2007, the percentage of people in poverty based on income was 35.7 percent, and it dropped to 22.5 percent in 2014, which means more than 1 million Ecuadorians were lifted from poverty. Meanwhile, extreme poverty was reduced from 16.5 percent to 8.5 percent, according the National Statistics and Census Institute.
In urban settings, the reduction was from 24.3 percent to 16.4 percent, and the rural settings experienced a staggering drop from 61.3 percent to 35.3 percent. These statistics show that poverty has been reduced in both the cities and the countryside. Between 2007 and 2012, the South American nation reduced its Gini index (an international measurement to calculate inequality) by 7 points, from .55 to .48. Compare this to the rest of Latin American countries, which on average reduced their coefficients by 2 points, .52 to .50.
Aside from the enormous reduction in poverty rates, the current government is also recognized for its investment in public services. Last year, a record was reached when $8.85 billion were invested in the public sector, a figure that can be multiplied by seven compared to what was invested in 2006, according to the National Secretary of Planning and Development. More than $12 billion has been invested by the government in the health care sector in the last eight years. Around 20,000 new medical professionals have been trained. The list of achievements that the right wing scoffs at and calls a “dictatorship,” goes on and on.
(Statistics obtained and translated from TeleSURtv.net)
¡Viva la Revolución Ciudadana! ¡Viva America Latina Unida!
While all the major regional economic and political bodies have stood firm on the side of Correa, there were concerns that this political destabilization campaign could lead to violent protest like the ones Venezuela has had to face for more than a year now.
Due to concerns that the right-wing populist movement could gain traction, claiming repression and “lack of democracy,” on June 16 the government decided to temporarily halt the passage of the Inheritances and Capital Gains Tax Laws. Correa and the National Assembly approved a call for a “national dialogue period” to start on September 15 where intense debates and discussions are expected on the proposed laws.
The period of dialogue is expected to last a minimum of three months. To quote Correa, “We want debate, not screaming. We want arguments, not manipulations. All this should have been done in the Assembly, but it has been impossible with such disinformation and violence generated.”
While this article has focused almost exclusively on the internal situation in Ecuador, what should not be a side-note is the role the U.S. is playing in the region.
In March, the White House asked Congress to approve $2 billion to continue intervening in Latin America. This is more than a 34 percent increase from the previous year. More than half of these funds are targeting Central America, but in the proposal it explicitly states that “other funds will be destined to promoting freedom of the press, human rights and the promotion of democracy in Cuba, Venezuela, Nicaragua and Ecuador.”
What is happening in Ecuador cannot be removed from what is happening in Venezuela, where a similar effort to destabilize the country has put major strains on the Maduro government and the Venezuelan people.
the U.S. desperately wants to regain control of its perceived “backyard.” This is what drove the 2009 coup in Honduras, which has made it the most dangerous country for journalists and unionists. It is what is driving the “Merida initiative” in Mexico, where a supposed “Drug War,” which is really a war against the people, is leading to horrific human rights violations.
The courageous anti-neoliberal and pro-sovereignty movements in Latin America, which emerged from militant left-wing struggles in the 70s and 80s, has made many fighters of that era into heads of governments. These government have offered an alternative to the national comprador bootlickers and transnational imperialists, whose decades of plunder of the region left the masses in extreme poverty.
As fighters in the belly of the beast, our first and foremost struggle is to expose the imperialist politics of intervention in Latin America and stand in solidarity with the governments that raise the banner of the poor, dispossessed and oppressed of our sister region.
The contradictions and criticisms that arise inside any movement and struggle must be resolved principally in that same country by the individuals and organizations who live and breathe it. Our stand in solidarity, to remove the weight of imperialism from their backs, is essential so they can fight freely and continue raising the banners of socialism and independence.
