Monday, January 18

Sánchez will change the regional financing law to satisfy ERC and raise taxes in Madrid

History is written by force of paradoxes. Three decades ago one of the flags of Catalan nationalism was the claim for greater fiscal autonomy, with the famous 15% of personal income tax that Jordi Pujol managed to start Felipe Gonzalez, forced for the first time to investiture pacts after losing his absolute majority. Today the path is the opposite, ERC wants to put an end to the way in which that autonomy has been exercised, especially in Madrid.

Another socialist president, Pedro Sanchez, will address this reform in a specific commission agreed with the Republicans, before which it has already raised the cry Isabel Diaz Ayuso. “I will be his worst nightmare if he touches the pocket of Madrid,” the regional president warned the chief executive. Sánchez replicated his words, in a joint press conference in Mallorca with the Italian Prime Minister, Giuseppe Conte, assuring that it is not an “ideological” issue but rather “solving a problem of fiscal harmonization” as they also intend, he assured without giving names, some regional presidents of the PP.

The independentistas, in the final stretch of the negotiation of the State’s general budgets in which they are, with the permission of Bildu, the great protagonists, they intend to end what they call “unfair competition” of the Madrid’s community. The governments of the PP in the region that houses the capital of Spain (now in coalition with Ciudadanos) have always boasted of the low taxation that they have been applying for decades, for example with the bonus of some taxes such as inheritance and donations.

An unsupportive practice in the opinion of the Catalan independentists, who not long ago bellowed against the supposed fiscal plunder that the central State – the same one that they now ask for help as parliamentary partners of the Government – would have inflicted on them for a long time. “Privileges are over” proclaimed this Wednesday the acting Catalan president, Pere Aragonés.

The commission that ERC has managed to promote will analyze everything related to the “big fortune” tax. Many of them would have established their residence in Madrid due to the greater return on their assets, according to several tax experts, a practice that ERC and other leftist groups consider “tax dumping.”

A possible reform

The fiscal harmonization between autonomies, discounting the special regime shielded in the Constitution that Navarra and the Basque Country enjoy, is not a chimera, these experts explain. In fact there is a Tax assignment law which could be an ideal instrument for the demands of the independentistas, and could be done by modifying the Autonomous Financing Law. Although, yes, it cannot be budgetary matter.

However, the sources consulted on tax matters warn of the difficulty that always involves taxing the patrimony, something for which it was necessary to establish a particular model in the Treasury, 720, dedicated to assets abroad, because “the mere declaration of Assets did not work.”

It so happens that during the recent parliamentary plenary session in which the amendments to all the Budgets were rejected, the Minister of Finance, Maria Jesus Montero, he reproached the leader of Ciudadanos, Inés Arrimadas, which intended to condition its support for Public Accounts to the processing of a Law other than the budgetary one.

He was referring to the educational reform of Minister Celaá, whose amendment that eliminates Castilian as a vehicular language is not to the liking of the orange party. Now, however, the Executive is willing to implement other reforms outside the processing of Budgets, in exchange for ERC’s support.

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