One common exempt minimum for all the autonomies of common regime. That is one of the points that are on the table in what, in principle, must be the last meeting of the expert commission created by Hacienda to give guidelines on Tax Reformwith the initial objective of delivering its conclusions to the head of the ministry, Maria Jesus Montero, next week. This is one of the ideas being considered to limit the extreme tax competition between autonomiesalthough PP communities, especially Madridare radically opposed to measures aimed at increasing taxes and advocate bonuses that exempt from the payment of inheritances and donations or substantially reduce their liquidation or free them from estate tax, which has acted as a magnet for certain fortunes.
The wealth tax, which was reinstated in 2011 after the financial crisis, is widely criticized for falling essentially on the middle classes rather than the highest net worth. The Catalan employers Work Promotion, has anticipated the conclusions of the wise men of the Treasury and this week has released those of his own group of twenty experts and tax advisers, who advocate the removal of a tax, which exists in a similar way in very few countries such as Liechtenstein, Norway or Switzerland and in the European Union (EU), only in France, where it became a tax for homes with a net value of more than 1.3 million euros. United We Can, for its part, is in favor of transforming it into a tax on large fortunes. The PSOE does not pronounce itself and hides behind the conclusions of the commission of experts.
Inheritance and donations
This tax, together with inheritance and donations, two of the great taxes ceded to the autonomies, focus the latest debates of this group of specialists who were entrusted a year ago to prepare a white paper. The need for a certain harmonization in this matter between territories has meant that the discussions to prepare a consensus text have lasted longer than expected. Among the ideas that are being considered is also a review of the exemptions for the family business, which has caused alarm among these companies. On other points, such as environmental or green taxation, the discrepancies are minor, since most of them are recommendations from the European Union (EU), according to sources familiar with the debates.
One of the points of discussion now is whether the conclusions they reach are presented as proposals or as a kind of recipe book from which the Government can choose, sources familiar with the debates explain.
Another option on the table is a dual tax, similar to the one applied in the US. It is the model that, in its day, ERC proposed in an amendment to the 2021 State Budget project that was discarded by the Government. According to this model, in addition to the regional quota, the state quota of the Wealth Tax would be created, according to a minimum exemption and a tax scale applicable to the entire State. But only the difference between the state quota and the regional quota would be paid into the State, with the limit of the first one. Thus, for example, if the state quota resulted in 100 euros and the regional quota, zero, the total of the 100 euros paid by the taxpayers of that community would go to the coffers of the Treasury. On the other hand, if the regional quota were 100 euros, the State would enter zero euros. If the regional quota were 120 euros, all of them would be for the coffers of the autonomy in question. Ultimately, this dual model guarantees a minimum imposition without the autonomies losing their regulatory capacity over the tax.
Government sources hope that the experts can conclude their report this Thursday, before its official presentation next week.
The conclusions of this white paper should guide the political debate inside and outside the Executive for the design of the fiscal reform committed within the legislative agreement between PSOE and United We Can. The conclusions of this white paper should also hang the work to advance in the design of the fiscal chapter of the new regional financing model.
From the position of ERC as a parliamentary ally of the Government, the Catalan group has tried to promote a harmonization of the Wealth Tax in the whole territory to put an end to the fiscal dumping that, from its point of view, is practiced by communities such as Madrid, with a zero rate on this tribute.
The only thing that ERC got from the Government, in return for the approval of the 2021 State Budget, was the approval of an amendment to create a bilateral commission between the Treasury and the Government for the fiscal harmonization of the Wealth Tax in all the the autonomies. Such a bilateral commission was never created. It was replaced by the commission of experts.
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A group of wise men to have recipes to raise more
Presided over by Jesús Ruiz-Huerta (creator of the fiscal balances with the socialist president José Luis Rodríguez Zapatero) and with Alain Cuenca (general director of the Institute of Fiscal Studies) as secretary, this group, constituted in April last year, initially had with professors and experts such as Fran Adame, Antonia Agulló, Olga Cantó, Laura de Pablos, Santiago Díaz de Sarralde, Xavier Labandeira, Santiago Lago, Guillem López Casasnovas, Julio López Laborda; David López Rodríguez, Carlos Monasterio, Saturnina Moreno, Violeta Ruiz Almendral, Maria Teresa Soler and Marta Villar.
The committee came to have 18 members, with the subsequent entry of Ignacio Zubiri, professor of Public Finance at the University of the Basque Country. And now, after his departure and that of Monasterio, professor of Public Finance at the University of Oviedo, he is 16.
Set up in April of last year, the commission is