Tax competition between autonomies unleashes tax debate

Published by
Peter Kavinsky

Increasing competition between the Autonomous Communities when it comes to announcing tax cuts and the elimination of some taxes has led to the debate about their governance being opened just a few months before the election “super year” of 2023 when they are scheduled to begin. municipal, regional and national elections.

Integration, Social Security and Migration Minister José Luis Escrivá ignited the debate on Tuesday, advocating increased fiscal centralization of the state to avoid the “nonsense” of tax competition between communities.

Minister of Integration, Social Security and Migration José Luis Escriva during the plenary session of the Senate. EFE / Juanjo Martin

Escrivá, who specified that he was making these statements on a personal basis, defended the adoption of the so-called “Australian model”, based on the calculation of the amount of expenditure per inhabitant necessary to provide services and in which the state is subsequently alone to transfer resources corresponding to regions.

Opposition and government against

The recentralization proposed by the Minister of Social Security was rejected by Alberto Núñez Feijoo’s PP, who called for “no demagogy” on fiscal policy and respect for the autonomy and powers of regional governments.

The government itself also did not support Escrivá’s thesis, and its spokesman Isabel Rodriguez ruled out that the executive branch was looking into tax centralization, despite its criticism of claims by PP-run communities to cut or eliminate some taxes.

In this sense, Rodriguez insisted that the government understand that any changes in the fiscal area should be framed in a regional funding model.

Minister’s press secretary Isabel Rodriguez Garcia at a press conference after the meeting of the Council of Ministers. EFE / Juan Carlos Hidalgo

On the PSOE’s side, its congressional representative Patxy Lopez advocated “shared financial responsibility” between communities and criticized the fact that some are already competing in tax cuts because that way “they leave the bulk of the citizens”.

United We Can and the government’s partners in parliament condemned the “dumping” (unfair competition) in fiscal matters that some communities intend to practice and called on the executive branch to take steps to avoid it.

Andalusia and Madrid abolish wealth tax

The debate escalated this week after Andalusia’s popular president, Juanma Moreno, announced on Monday that he was abolishing the wealth tax in his area. This measure has already entered into force in the Community of Madrid, also administered by the PP.

“From here I tell the Catalan businessmen that their land is here. Catalonia has an inheritance and gift tax; not here. There is a wealth tax in Catalonia; not here. Besides, we will never be independent here,” Moreno said on Monday in statements that made the Catalan government uncomfortable.

The tax administration debate comes months ahead of the 2023 electoral “super year,” which begins with municipal and regional elections in May and culminates in nationwide elections.

Online edition: Oscar Tomasi

Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org

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