The parliamentary uncertainty that has weighed on the government since last July adds a new challenge to the stability of the legislative body. The tax reform, which Brussels demands as one of the commitments to consolidate the stability of the accounts, is heading for disaster despite the fact that the Treasury has been preparing for months a new package of measures aimed at increasing the pressure on the highest incomes, and correcting the loss of collection potential of some tax figures, which have been totally or partially subsidized by the various autonomous communities of the Popular Party.
Moncloa has been insisting for months that it considers that the community commitment is respected; However, those of María Jesús Montero were considering promoting in the coming months a tax package to accompany the budget project and that would include a harmonization of the inheritance and gift tax, an increase in the maximum rate of personal income tax for capital income, or a new twist on the tax on large fortunes. Sumar aspires to include a battery of measures, among which the creation of a tax on large inheritances, from one million euros, or a reform of the corporate tax with which they intend to collect more than 13 billion dollars per year.
The objective is none other than that of to deploy a text capable of satisfying the European Commissionwhich obliges Spain to “review and simplify” the tax system, which not only guarantees an increase in revenues, but also reinforces a structural change in favor of the long-term consolidation of accounts, when current elements – such as the effect of inflation – belong to the past, and budgetary rules continue to require a way of controlling public spending.
Brussels has laid the foundations for what it wants in the Component 28. Demand a modernization of the tax system that improves collection and efficiency. The document criticizes the “numerous exemptions and deductions” existing in Spain and calls for an assessment of “whether the existing tax advantages achieve the objectives for which they were created, or whether they should be revised.” In addition, the Community Executive insists that current tax figures must be analyzed in depth to adapt them to the economic context, and advances in the incorporation of new taxes “in line with the most recent trends”The European Commission recalls in its document that Spain has a negative income differential compared to the European Union, and reiterates that “the current situation generates an opportunity to carry out a reform of the tax system that, for the moment, remains unexploited.
There is no shortage of proposals. The white paper that the Minister of Finance commissioned in 2022 from a team of experts led by Professor Ruiz-Huerta proposes a thorough review of the tax system. Among the main measures, the document proposes a simplification of VATreducing the general rate to 15% and removing the reduced rates in exchange for compensation measures for the most affected sectors. They also propose review all these exemptions from personal income taxor the reform of environmental taxes, in order to increase collection by between 6,000 and 15,000 million euros more.
However, the intentions of Brussels and the tax experts are colliding with open tax competition between the different autonomous communities. A good part of the regional governments of the Popular Party have deployed a network of bonuses that – in 2022 alone – has slowed the collection dynamics of more than 5 billion euros. This has recently been censored by the Central Executive. The president, Pedro Sánchez, criticized the fact that the LACC, like Madrid, demands more funds, even though it bases its tax policy on the approval of advantages or tax reductions. “They ask with one hand, while with the other they give tax gifts to the richest,” said the socialist of the PSOE executive a few weeks ago.
The solution could be the harmonization of certain tax figures. A requirement that several autonomies have been demanding for some time. “There must be tax harmonization, both in the most important elements of taxation and in tax rates, establishing a minimum and leaving the maximum to each autonomous community,” said the Minister of the Treasury of Castilla-La Mancha, Juan Alfonso Ruiz Molina. in a recent interview with elEconomista.es.
Junts will hide their position until the last moment of each vote
Legislative action has long since ceased to accompany the executive; and – today – any text that Montero wants to submit to the Cortes is doomed to failure. Last Tuesday, Junts once again reversed, by surprise and at the last moment, a key initiative of the government in the Congress of Deputies. Those of Puigdemont They went from abstention to no considering a bill to regulate seasonal housing rental contracts. “A right-wing bloc is forming between PP, Vox and Junts that Feijóo will surely bring to Moncloa,” warned Gabriel Rufián, spokesman for the ERC, in the corridors of the Congress of Deputies last Wednesday. postconvergent They continue to warn Sánchez – in plenary session after plenary session – not to count on his seven deputies to promote the reforms he is considering. A situation that compromises the government action that the Community Executive demands of Spain. “Where there are political failures, there will be parliamentary defeats,” said the party’s president, Laura Borrás, in an interview with TV3 on Thursday. This is the argument that Junts is relying on. They will not vote on the accounts until Sánchez publicly pressures the judges to impose amnesty on Carles Puigdemont. “The PSOE could be more active against the judges who stop the application of the amnesty. The Public Prosecutor’s Office could file a complaint against some judges of the Supreme Court for delay in judicial action,” suggested the secretary general, Jordi Turull, two weeks ago.
Junts’ appeal took effect a few days later. Last week, the State Attorney General sent a letter requesting the removal of the Constitutional Court magistrate, José María Macías, from the team responsible for deliberating on the appeals filed against the amnesty law. Álvaro García Ortiz signed a letter questioning Macías’ impartiality. A maneuver interpreted as a nod to those of Puigdemont, a few days before the vote on the path to stability in the Congress of Deputies, which will precede the presentation of the Budget project.
