The socialist president of the Valencian Community, Ximo Puig, has put Madrid’s ‘advantageous’ tax system back into orbit, reaffirmed last Thursday by the Minister of Social Security, José Luis Escrivá, which also encouraged the debate after the meeting between the two by accusing the Madrid region of doing ‘fiscal dumping’ and also aligning itself with Puig to request a tax on high incomes that compensates for the capital effect of Madrid.
But nothing is further from reality, the truth is that Madrid already compensates the rest of the autonomies through the ‘common fund’ shared by all the communities except for the Basque Country and Navarra, with their own tax systems to be founded on the foral regime. Specifically, the capital region already contributes 70.3% -more than 4,343 million euros- of the net contributions of the Guarantee Fund for Fundamental Public Services, where only three regions (Madrid, Catalonia and the Balearic Islands) contributed resources at the end of 2019 by providing the mechanism with more income than received. In fact, Catalonia and the Balearic Islands are very far from the capital, with 24% (1,468 million) and 6% (364 million) respectively. In absolute values, Madrid is also the one that contributes the most to ‘solidarity’ between communities with 18,181 million. A figure that exceeds the total contribution of Catalonia by 500 million and by more than 5,000 million to Andalusia.
This fund already serves to compensate those communities that register a lower income so that they can finance basic services, Health and Education among them. For its calculation, the adjusted population is included instead of the real one, so that other circumstances such as the profile of the inhabitants can be addressed.
In this sense, in net terms, the region that received the most in the last batch was Andalusia with 4.842 million, followed by Canary Islands (2,951 million), Galicia (1,539 million) and Castilla la Mancha (1,291 million). For its part, the autonomy that presides Ximo Puig, Valencian Community, was the fifth that received the most balance with 1,196 million.
According to data from tax authoritiesIf we put 2009 as a reference – the year in which the current Autonomous Tax System was approved – and until 2019, the contribution of the Community of Madrid has been around 36,000 million. A figure that triples that of Catalonia, which in the same period provided the fund with some 12,600 million.
In fact, Madrid’s contribution the set of fourteen autonomies that participate in the Fundamental Public Services Guarantee Fund has remained above 70%.
In this sense, different business sources in the region regret that Madrid maintains this level of contributions, when it is the first community in tax capacity, contributing 2,361 euros per inhabitant, while it collects by ceded tributes 3,482 euros.
A disparity that was also denounced by the president of the Community of Madrid, Isabel Diaz Ayuso by adding that “being Madrid the community that contributes the most to the ‘common box’ and to the rest of the administrations, we are fourth from the tail in investments by the State and the ninth in financing,” lamented the councilor.
In the same way, the Minister of Economy, Finance and Employment of the Community of Madrid, Javier Fernández-Lasquetty, after accusing Puig and Escrivá of “prosecution and prosecutorial ‘madrileñophobia'”, in addition to going against the citizens of Madrid for the simple fact of being. At the same time he recalled that “Madrilenians do well with low taxes, like those that Madrid has been setting up for sixteen years in a row.”
The debate wanted to settle it yesterday the owner of the Treasury. Maria Jesus Montero. by contradicting Escrivá after assuring that the proposal to tax Madrid with a high income tax “is not on the government’s agenda, nor will it ever be.”
What remains is that the next battle horse between the Government and the communities, the tax harmonization, keep lurking over the Madrid tributary field.