The president of the Community of Madrid, Isabel Diaz Ayuso, will make Madrid the only autonomy of a common regime without its own taxes. It is an important step in the fiscal policy that the Popular Party has developed in the Madrid region since 2004. Why lower taxes encourages the economy, creates jobs and opportunities for all.
In the Community of Madrid we have been lowering taxes for 17 years in a row and without raising any. Now, the regional government is going to abolish all its own taxes while other autonomous communities have more than a dozen and continue to extract millions of euros from taxpayers under the erroneous conviction that raising taxes has positive effects.
Thanks to the liberal policies of the governments of the Community of Madrid over the last 17 years, Madrilenians have saved almost 53,000 million euros, at an average of 16,500 euros per taxpayer. Money that has remained in the hands of its owners because it is the fruit of a lot of effort and work. A fiscal policy that works and that has led Madrid to become the economic engine of Spain.
Today, Madrid’s economy accounts for 19.3% of the national GDP, when in 1980 it was the fourth region in per capita income.
The Community of Madrid has the smallest underground economy in Spain, with a percentage of 16.2%, compared to the national average of 23.1%
It is just from 2004, when liberal policies began to be applied, when the Madrid economy grew much more intensely, to the point of becoming today the largest economic engine in Spain, with a per capita income of 35,913 euros, 35.9% more than the national average. It is no coincidence, and neither is it that Madrid leads the attraction of foreign investment or the creation of companies.
The Community of Madrid has the smallest underground economy in Spain, with a percentage of 16.2%, compared to the national average of 23.1%. The fiscal policy of the Community of Madrid is a clear example that by lowering taxes there is less fraud and more economic activity. Less taxes to grow more.
Madrid has the lowest rates in the autonomous section of personal income tax. The minimum tranche is 9% compared to other regions that have it at 12%. Despite this, the Community is the region that collects the most for this tax, with 11,663.935 million in 2019, according to the latest data from the Ministry of Finance.
We also have higher bonuses in inheritance and gift tax than many other autonomous communities. and we are the second highest grossing community. What’s more, tax cuts have reduced tax fraud, since self-assessments in donations, for example, have increased by 1,000%.
The Community of Madrid model is a clear reflection that things work better with low taxes. They work better for the people of Madrid, but also for the whole of Spain, because Madrid is the region with the most solidarity and the one that contributes the most, 70%, to the Guarantee Fund for Fundamental Public Services with which the health, education or social services of the rest of the autonomous communities are financed.
The Administration cannot intervene in the will of the citizen with the arrogance of the one who believes that he knows better than anyone what the people need
This management model is allowing us to provide high quality public services and make efficient and rigorous use of spending. Madrid is the third region with the lowest debt, behind the Canary Islands and the Basque Country, which have different tax regimes.
People know what they need and what they want to do with the money they have earned working. To use the phrase of the great French liberal economist Jean-Baptiste Say: “I cannot think that those who pay taxes would not know what to do with their money if the tax collector did not come to their aid.”
In the government headed by Isabel Díaz Ayuso, we are convinced that the Administration cannot intervene in the will of the citizen with the arrogance of those who believe that they know better than anyone what the people need.
On May 4, the people of Madrid sent a clear message to Spanish society: support for policies that respect people’s freedom.
The recent health crisis has shown us the convenience of giving citizens greater freedom to make their own decisions. Thanks to this, the Community of Madrid is better resisting the effects of the crisis and is going to come out earlier, pulling the national team, as has happened in the past. With more freedom and less taxes.
*** Javier Fernández-Lasquetty is Minister of Economy, Finance and Employment of the Community of Madrid.
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