Tax cut: from palliative to inflation to utilities risk

mitigate the effects inflation A common situation that makes it increasingly difficult for families in the Community of Valencia to reach the end of the month without causing a significant drop in income that puts the welfare state and the provision of public services at risk. This is the tricky balance that Generalitat Valenciana’s chairman, Ximo Puig, had to face after he announced it during the general policy debate last Tuesday. tax reform. All this is based on pressure from Moncloa and its partners at Botànic, Compromís and Unides Podem, whose measures were not met with open arms at first, despite being added to the tax cut a few days later. Keep charging more for those who have more. In addition to these political concessions, experts in the academic, economic and financial fields are analyzing the impact they believe Puig’s plan will have for BİLGİ.

First to speak is a professor of Applied Economics at the University of Alicante (UA) Paloma Taltavull, who has questioned whether cutting taxes for incomes below 60,000 euros, the main measure of the president’s plan, benefits 97.4% of taxpayers. Data processed by Consell. Taltavul, generalitat noticeably decreases. This does nothing but celebrate that the funds released will have a direct impact on consumption and contribute to the recovery of the economy.

The UA professor thinks the reform is aimed at achieving a better distribution of income, where households with greater liquidity volume are dedicated to purchasing goods. “One of the problems we’ve found is that if the poor don’t consume and the middle class can’t because of inflation, the rich won’t do it in our area because their market is elsewhere in the world. Valencian Community», in this regard, adds a positive impact on job creation before adding it to the benefits.

Expansion

Given all the arguments presented, Taltavull describes Puig’s tax cut announcement as “perfect” because he believes it will pose a problem. market expansion and stimulate economic activity. He adds that the environment of the Valencian Community, which offers a good quality of life and miles of coastline, can serve as a pretext to attract foreigners and achieve a better and more concentrated labor market. In summary, he believes it is worth taking the risk of reducing income as the benefits of increased consumption and job creation are greater.

The assessment made by Antonio Pérez, head of the financial commission of the Alicante Association of Economists, is also positive. Their argument for optimism is based on higher disposable income, which would make it possible to reduce the effects of inflation. “The Rise energy prices It also brought about an increase in the prices of other products. This sums up the situation in Europe since the start of the war in Ukraine at the beginning of the year.

Economists demand that the State act holistically, beyond an autonomous “war”.

Luis Chinchilla, president of the Society’s Association of Professional Tax Advisors, wants to first point out that what Puig announced this week cannot be classified as a tax reform. To speak in these terms, it’s a action at the state level, And that’s not the case. No one would dare to do that,” he says. Indeed, there are several experts consulted who point out that the most effective would be a reform that would bring the entire State together, rather than the recent financial “war” between the autonomous communities.

Some analysts believe that the upward trend in prices will continue and the solution requires “suffer”.

As Antonio Pérez points out, Chinchilla thinks Puig’s main goal is to counter the extra cost of energy products. For this purpose, it is aimed to reach a certain purchasing balance. income installments and the expert considers that the measure is necessary at present, despite the fact that its implementation could harm Community budgets. Finally, he predicts that “inflation will continue for a while and can only be resolved through suffering”.

Capture


Ignacio Jiménez Raneda, the former president of the UA, argues that going “small print” is necessary given the enormity of what has been proposed by the Generalitat president. It also warns against the risk undertaken. regional accounts suffering, especially in a situation where there is underfunding such as the Community. “Puig wanted to send a signal of relief to the population with the small margin of financial power he had,” he adds to his analysis.

For Jiménez Raneda, the real question isn’t tax cuts. “If we had asked this question, everyone would have agreed,” he replies. The former rector believes that the in-depth consequences of such an announcement should be evaluated, especially those related to securing the rectorate. community services. “There is no tax for a funny reason. The goal with them is to raise funds to offer compensation to the community,” he adds, pointing out, like other experts, that one of the biggest keys is to stop the rise in gas and fuel prices in the face of a fall and winter that will be very complex.

Another argument, more political than economic terms, “election race” a period in which all parties are already involved, prompting officials like Puig to make far-reaching announcements. Professor Emeritus Carmen Herrero, a UA and IVIE investigator, points to this thesis. “One-sided decisions in the tax system are dangerous and absurd,” she says.

Professor Emeritus of Fundamentals of Economic Analysis thinks that in a global society, any action taken affects others and superiority is not always positive. He also believes the underlying problem is that “serious tax reform” has not been addressed. Likewise, he warns that the danger is that “pressure is concentrated on the average income of the business and not enough progress towards the top.” Finally, he warns of “temporary measures” and questions the situation. competition between autonomiesDebunking such arguments as those of the Andalusian president Juan Manuel Moreno Bonilla: “No company will leave Madrid and settle in Andalusia”.

landing

José María Gómez Gras, professor of Business Organization at Miguel Hernández University (UMH) in Elche, is one of those who wonder who might be against the tax cut. It is clear that some measures should be taken in the face of galloping inflation.” Alongside the announcement by Puig, Gómez Gras also thinks Generalitat will need to work on other taxes. estate and inheritancejust as it was done in different parts of Spanish geography.

According to Antonio Escudero, retired UA professor and former director of the Institute for International Economics, what Puig is doing is going against the doctrines created by the European Central Bank or the International Monetary Fund, whose proposal is not to cut taxes directly. but to create an extraordinary tribute great wealth and distribute that money among the most vulnerable families and the business in crisis.

Finally, Emilio Cencerrado, director of the United Arab Emirates Department of Economic and Financial Disciplines, argues that the announced measures are “in the best interest of all”. Raise the exemption minimum or income tax rate are some of the main arguments it supports. “Deflation is positive because it corrects for inflation, and laws should include it semi-automatically every year,” Cencerrado said.

Source: Informacion

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