What is the Wealth Tax?  The keys to a tribute that confronts parties of the left and right

The decision of John Manuel Morenopresident of the Junta de Andalucía, to suspend the Wealth Tax has put, again, fiscal policy at the center of the war between the left and the right. The Government of the PSOE and United We Can maintain that the tax must be part of its fiscal policy and has long announced measures to limit its reductions. Meanwhile, the regions governed by the Popular Party increasingly limit this tax figure and other similar ones, such as Inheritance and Donations.

To get started, what is wealth tax? Better known as the ‘tax on the rich’, this figure is designed so that the main fortunes of the country increase their contribution to the public coffers.

It is a tax that they have to pay taxpayers from 700,000 euros of assetsexcluding 300,000 corresponding to their habitual residence.

[El Gobierno se desliga de la recentralización de impuestos propuesta por Escrivá: “Es una opinión personal”]

According to data from the Tax Agency (the most recent, from 2020), Some 189,163 Spaniards pay this tax, with an average declared wealth of 3.5 million euros. In total, it allows annual income of more than 1,200 million euros, about 6,348 euros per taxpayer.

In any case, it is a tax in extinction in Europe. Only Switzerland and Norway maintain it. In addition, the enemies of Heritage argue that this figure is a double taxationbecause the person who pays it has already paid the corresponding taxes for the goods and income audited.

Until Andalusia approves them in the Governing Council, Madrid is the only region with this tax discounted at 100%. And this has had a significant pull effect among high net worth individuals.

The region that Isabel Díaz Ayuso presides over is, by far, the Spanish territory with the ‘richest’ population in Spainwith an average declared wealth of more than 10 million euros.

defenders

The Community boasts that the tax cuts are precisely the reason for its good economic performance. This strategy is defended by both the PP and Ciudadanos and Vox. In fact, the objective of Moreno’s Andalusia is, to a certain extent, to compete with Madrid in terms of taxes to attract investment and companies.

The Patrimony Tax, like the Inheritance and Donation Tax, may be subject to reductions by the autonomous communities precisely because, despite being state-owned, they can manage them.

But the government He has long wanted to put a limit on this possibility. The Ministry of Finance has already announced, on several occasions, its idea of ​​harmonizing and limiting the reductions that the autonomies can make of these taxes.

This would mean a sort of ‘centralization’ of tax management. This Tuesday José Luis Escrivá, Minister of Inclusion, Social Security and Migration, has gone further and has defended, precisely, a recentralization of taxes but has framed it in a “personal opinion”. Something that Isabel Rodríguez, spokesperson minister, has also done in the press conference after the Council of Ministers.

[Podemos culpa al PSOE del “paraíso fiscal para ricos” de Madrid y Andalucía y exige una ley para evitarlo]

In any case, PSOE, United We Can and other parties of the left-wing bloc defend maintaining the Wealth Tax beyond regional policies.

In recent years, efforts have been made to instrumentalize this tax to shape a fiscal figure that serves to raise more from the higher classes. In fact, this is one of the objectives of the coalition government pact: to study “the taxation of large fortunes in order for them to contribute to a fairer and more progressive tax system.”

In fact, the commission of experts responsible for the ‘White Paper’ on tax reform, released at the beginning of this year, has been against the ’emptying’ of this tax and advocates maintaining it.

Source: Elespanol

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J. A. Allen

Author, blogger, freelance writer. Hater of spiders. Drinker of wine. Mother of hellions.

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