Gringo Bitch Box: Tax stuff (VAT, property, cap gains), Tranvía deadline, and a great cause for coastal children

Dec 27, 2016 | 29 comments

When I worked on the staff of my university daily — ah, those many years ago — I was editor of a feature called the “Bitch Box.”

There was an actual box in the newspaper office where students could drop their hand-written (how quaint) complaints about anything that bothered them. I would compile them, respond to a few, and publish the results twice a week.

Anyway, I’ve decided we need a Gringo Bitch Box, since bitchin’ seems to be a favorite pastime among many of us (I admit I do my share).

Well lately, I’m hearing lots of bitchin’ about taxes and I thought I’d look into them and set the record straight where I can.

One complaint is about Ecuador’s VAT tax, which is officially 12% but has been jacked up for a one-year period (we’ll see about that) to 14% to help with earthquake reconstruction. Anyway, lots of expats bitch that it’s outrageously high, comparing it to state sales tax back in the U.S.

Well, it turns out we get off light in Ecuador. We pay well below the Latin American average — even at 14%. Our neighbors in Peru and Colombia pay 18% and 19%. It’s 21% in Argentina, 17% in Brazil, and 16% in Mexico.

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Broadening the comparison, VATs average a little more than 20% among European Union (EU) countries.

And forget the comparison to U.S. sales taxes. For one thing, they’re collected by the state, not the feds and … the U.S. income tax rate is higher than that of any Latin American country, and is way more than Ecuador’s.

How about property taxes? The average annual property tax in Ecuador for residential and small farm property is $124. In the U.S., it’s $3,150. In the EU, it’s $4,800. Ecuador ranks fouth lowest in Latin America and the Caribbean in property tax rates.

And, by the way, don’t worry too much about the proposed capital gains tax increase (75% on “extraordinary” gains), according to my Ecuadorian neo-con friend. He says that even if it passes, it will either be repealed or ignored by the next government. He says it’s a Correa thing and Correa is gone in May.

‘Nuf said. Stop your bitchin’ (about taxes, anyway). (Info courtesy of the EU office of economic statistics)

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Another big bitch, of course, is the tranvía, and one popular line of thought among expats is that it will never be finished. Or, that it will be finished in 2050, or on some other distant date when most of us have passed the veil.

I’m here to tell you that there is, indeed, a deadline, and it’s all about politics (surprise, surprise). No, I don’t think the train will be running in October, the latest official deadline. In fact, I don’t think it will be running any time in 2017 or even early 2018. I do, however, think it will be choo-chooing down the track by mid-2018.

Why? The mayor’s up for reelection the following February.

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Speaking of bitchin’, did you read Susan March’s column about how bad it is for your health to sit on your behiney all day in front of a monitor bitchin’ on social media? She says that it’s much healthier to stand at your monitor while you bitch.

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Finally, and certainly not speaking of bitchin’, did you read Dr. Rut Román appeal yesterday to fund a book mobile for kids in the coastal earthquake zone? Many of us have donated to the material needs of earthquake victims and these are absolutely vital. On the other hand, as Rut points out, there is also a great need for resources that nourish the mind and spirit of the children who have been so terribly affected by the disaster. They need resources that fire the imagination. Please read Rut’s excellent article and help if you can.

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Oh, and finally, finally, and speaking of bitchin’ again, does anyone out there know the university where I was the Bitch Box editor? Hint: Newsweek magazine called it the “Berkeley of the South” in 1971.

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Please send tips, rumors, Bitch Box bitches, and alt news concerning expats and Ecuadorians, no matter how outrageous, to Alice at editor@cuencahighlife.com, “attn: Alice.” She will look into them, attempt to verify, and report items that are newsworthy or have entertainment value.

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