By Bianca Fernet, stilettos-on-the-ground American economist in Buenos Aires, antidote to economists who act like economics is too complicated to understand and who spout off buzzwords that make you feel inadequate. Her website The Bubble covers pop and econ topics in Argentina.

Back in September 2012, Argentina introduced a 15 percent tax on credit card purchases made in foreign currency. They claimed that this 15 percent would be returned to tax payers demonstrating they had paid more than they owed in the previous year. Shockingly, that reimbursement was such a bureaucratic hassle that for many people it just never came to fruition.

And instead, that 15 percent turned into 20 percent.

Now, the Federal Administration of Public Revenue (AFIP) is raising the charge to 35 percent and applying it to purchase of physical foreign currency for travel costs. This closes the last legal window (albeit small) for individuals to acquire dollars at the official rate.

The Argentine press is abuzz with this story, especially because it will directly affect the tens of thousands of families planning to travel for the Christmas holiday. Where yesterday one dollar would have cost $7.39 pesos, today the “dólar turistico” will set them back $8.36 pesos.

That’s a hefty difference sure, but from where Economy Minister Axel Kicillof is sitting, it’s logical. Every time an Argentine uses his (or her) credit card para todos y todas to make a purchase in dollars, the seller is not stuck footing the bill for the exchange rate difference. That seller receives the appropriate sum in dollars for the purchase. Those dollars are provided by the Central Bank vis-á-vis the buyer’s local bank, thus draining Argentina’s slimmer-by-the-second foreign currency reserves.

Come at it a different way – let’s say Agustín is in Buenos Aires and has US$5000.00 he wants to spend in Miami on Blackberrys and bottle service at a swinging club on South Beach. If Agustín is smart, he will change those dollars into pesos at the “blue rate” (or black market rate,) and deposit $47,500.00 pesos into his bank account at Banco Ciudad.

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