Kast’s Radical Plan to Transform Chile; Overhauling the Overhaul

  • Presidential hopeful Kast commented in interview last week
  • Kast says his party is forcing debate within the opposition

Presidential hopeful Felipe Kast has a radical plan to transform Chile, even though part of it involves turning the clock back.

Two years after the biggest tax reform in 30 years, Kast wants to overhaul the system again; and as the government implements policies to guarantee free higher education for all, Kast says its time to implement a graduate tax system. With that in mind, the president of the Evopoli party is on a mission to renovate Chile’s right-wing opposition ahead of November’s election.

“The time has come for change,” Kast said in an interview in Santiago. “If the opposition wins the election, we must play on the offensive.”

The planning minister under former President Sebastian Pinera broke away from the leading opposition alliance Chile Vamos to form Evopoli in 2012. Now languishing behind almost all other candidates in the polls, Kast’s opinion may carry more weight than it first appears. Representative of a younger generation of politicians, Pinera will need the leaders of Evopoli if he wins the election, Kast said.

“I think he would love to govern with us,” Kast said. In the meantime, “we are forcing the debate on the right.”

The Manifesto

Central to Kast’s manifesto is a plan to simplify the tax system, implementing a flat tax on income and corporate profits of 27 percent to reduce evasion, cutting the value-added tax to 17 percent from 19 percent and closing loopholes for products such as education.

For more on the tax reform pushed through by Bachelet, click here

The new tax system should be neutral in terms of revenue and needs to be accompanied by spending cuts of about $2 billion, Kast said. Most of those savings can be achieved through greater efficiency, cutting the number of ministries to 14 from 24 and simplifying the more than 580 social programs that the government currently finances.

“In terms of social policy we have stayed in the medieval period,” Kast said. “If I lived like most of the people in Chile, I would be marching with them.”

And marching they have been. President Michelle Bachelet raised taxes by 3 percent of gross domestic product in 2014 after hundreds of thousands of students took to the streets to demand cheaper and better education. Students had been left heavily in debt in exchange for substandard teaching, they said. The time for change had come they said in a protest movement that captured global attention.

Back to Future

Just six years after the demonstrations started, Kast says the time has come again, but this time in reverse.

“With the same resources Bachelet used to reform higher education, we should have done a reform of early years schooling,” Kast said. Free higher education should be eliminated and replaced by a graduate tax.

Overturning the education and tax reforms is not pie in the sky, he said. Just as politicians fomented the student protests, politicians can create a new climate for change.

“If you think that the protests were spontaneous, you are underestimating the power of Chile’s political class,” Kast said. “Certain politicians knew exactly what keys to press.”

Still, removing a ban on profit making in education, put in place by Bachelet, would be a step too far, he said. “You have to choose your battles” and that one isn’t worth fighting.

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