Fri. Sep 30th, 2022

Growing competition among the autonomous communities comes as tax cuts are announced and some tax cuts are debated over their management with just months to go before the start of the 2023 electoral “super year”, when they are planned. Municipal, regional and national elections.

The Minister of Inclusion, Social Security and Immigration, José Luis Escrivá, fueled the debate this Tuesday by advocating greater fiscal centralization of the state to avoid the “nonsense” of tax competition between communities.

Minister of Inclusion, Social Security and Immigration, José Luis Escrivá, during a plenary session of the Senate. EFE / Juanjo Martin

Escrivá – who specified that he made these statements in a personal capacity – defended the adoption of the so-called “Australian model” based on the calculation of the amount of expenditure per inhabitant necessary to provide services and where the state subsequently transfers resources related to the regions.

Against the opposition and the government

The modernization proposed by Social Security Minister Alberto Núñez Feijore was rejected by the PP, who called for fiscal policy to “not engage in demagoguery” and to respect the autonomy and power of regional governments.

The government itself did not support Escrivero’s thesis, and its spokeswoman, Isabel Rodríguez, denied the executive study of tax centralization, despite criticism of PP-controlled communities’ declarations to reduce or suppress some taxes.

In this sense, Rodríguez emphasized that the government understands that any change in the financial sector should be built into the regional financing model.

Minister’s Spokesperson Isabel Rodriguez Garcia at the press conference after the Council of Ministers. EFE / Juan Carlos Hidalgo

On behalf of the PSOE, its spokesman in Congress, Patoxi López, supported “fiscal co-responsibility” between the communities and criticized the fact that some are already competing downwards in taxes, since in this way “they leave most of the citizens”.

United We Can and the government’s parliamentary partners have condemned the financial “dumping” (unfair competition) that some communities seek to practice and urged the executive to take measures to avoid it.

Andalusia and Madrid abolish wealth tax

The debate intensified this week after the popular president of Andalusia, Juanma Moreno, announced on Monday the abolition of the wealth tax in her community. This system is already in force in the Community of Madrid, also governed by the PP.

“From here I tell the Catalan businessmen that their land is here. In Catalonia, there are inheritance and donation taxes; Not here. In Catalonia, there is a wealth tax; Not here. And without that, here we are never going to be independent,” Moreno said on Monday, in a statement that caused discomfort from the Catalan government.

Discussions about tax management come months ahead of the 2023 electoral “super year”, which will begin with municipal and regional elections in May and end with national elections.

Web version: Oscar Tomasi

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