Tax reform adopted by the regional government is more of a political gesture than an act on the real economy. This is the general view of the experts who agree when pointing out that the agreed measures will be taken. almost negligible effect on activity and consumption. And not only that, they add that they also pose significant risks. possible flight of great fortunes or a decrease in sales of homes or other luxury items.
Antonio Pérez, head of the tax commission at the College of Economists, underlines this, although the reduction in personal income tax for incomes below 65,000 euros per year and the planned increase for incomes above 2023 “will not require significant changes in economic activity. will allow for a larger collection that is not so important ».
The danger of this measure, besides the 0.25% increase in the last three sections of the Wealth Tax, is that it could lead to a massive wealth outflow. “This is a tax that should no longer be in effect, as evidenced by the fact that it has virtually disappeared in Europe. But, in addition, it can lead to the fact that it increases. some are considering a change of residence to other communities or because they are looking for other instruments to pay less».
Likewise, Pérez adds that there will be a one-point increase in the National Transactions Tax for transactions exceeding one million euros. a deterrent effect on the purchase of luxury goods and homeswhich he underlines, “also generates high taxes.”
Economist Ignacio Jiménez Raneda, former rector of the University of Alicante, agrees, pointing out that the impact on activity will be very limited and that, in his view, what Consell wants is to transfer to the United States. population an image of financial progressivenessrelieving the lowest incomes without penalizing the middle classes.
In his words, “the truth is there are no stimuli for activity. It is a limited redistribution bet, which has an appearance that can be interpreted in terms of elections, as it is normal and natural in the decisions taken by all political parties.
Luis Chinchilla, President of the Valencian Community of Tax Advisors, thinks Consell is trying to find a solution to the rise in inflation, but reminds us that the marginal rate of personal income tax in this region is 54%. , too high and “doesn’t help at all to attract foreigners to settle here”.
They also have doubts as to why it was decided that incomes below 65,000 euros would benefit from deductions when “the barrier to being rich or not is defined”. For Chinchilla, the measures taken were “somewhat populist” and not contribute to promoting a culture of effort. “There are people who might think that if they have to pay more, they will stop creating wealth when that turns out to be something necessary for employment and investment – ​​he points out. Likewise, what needs to be done is to encourage spending and consumption ».
Companies criticize Inheritance Tax protection
The Valencian Commonwealth of Business Confederation (CEV) correctly identified the reduction of personal income tax, although it was also very critical of the maintenance of the Inheritance Tax and the lack of support measures for companies.
Salvador Navarro, head of the business organization, stresses that the proposed reform “shows that tax reduction is possible” and is positive in the economy, particularly in the context of private consumption, high inflation and slowdown levels. personal income tax will be gradually reduced, thus providing more benefits to the lowest incomes.
For the same reason, and given the same economic context and increased costs for companies, CEV misses out on other support measures for companies. In this sense, Navarro reminds that the election promise of reducing the tax base from 95 percent to 99 percent in Inheritance Tax and extending it to all family businesses, regardless of turnover volume, “does not come true again”.
Maite Antón, president of the Alicante Family Business Association (AEFA), hopes the issue can be redirected through changes. It also agrees with the CEV that more efficient management of public administrations and the fight against the informal economy will open up space to go further in tax reform and approve other social measures and aids to the productive fabric.
Source: Informacion
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