May 17, 2021

Redistribution arrives on the backs of companies | Economy

Redistribution arrives on the backs of companies | Economy

We have always defended from here that the best public budget is the one that goes unnoticed for economic activity, the one that manages to continue being more numerous the group that is pending of how much they give, that the one that watches how much they take away from it. The one that does not interfere in the spending and investment decisions of the taxpayers, the self-employed and the companies, and leaves hands free to dispose of a greater proportion of the income generated to consume or to invest. The budget project presented yesterday by the Minister of Finance does not have these attributes, but with some of the opposites, because it contains a significant increase in the tax burden, which will absorb up to 35.5% of the generated wealth in taxes, a full point more than the accounts of 2018. And a notice to navigators: this ratio will continue to grow in the coming years if this is the government that manages the state until approaching the tax pressure levels of the surrounding countries, which move through over 41%.

If so far the conservative heralds proclaimed each year the litany that each Budget was the one that was going to consolidate the recovery, the Minister of Finance, María Jesús Montero, no hairs on the tongue for ideological body to body, and with a fondness for electoral proclamation, admits that "these are the accounts of the turning point; This Government is on the streets, and for this reason it draws up a Budget that assumes a change of direction towards the redistribution of wealth, the strengthening of the welfare state, the fight against inequality, social justice and the help of the precarious. "

Nothing less than 25,000 million more will spend the Government this year, an absolute increase that was not produced for ten years, when Zapatero, in full crisis, came euphoric from the IMF summit and said he understood that it was to spend money, practice authentic Keynesianism. And for this, and given that the fiscal deficit can not exceed 1.3% of GDP by imposing the Cortes, revenues must rise significantly.

Nothing less than 9.5% to achieve an additional 20,000 million of income, which seems to be difficult to obtain judging by the expected growth for the activity. With an economy in clear deceleration, with an estimate of GDP advance of only 2.2% compared to rates of 3% in past years, it seems difficult to achieve a progress of the collection so bulky. But it seems even more risky than complicated, since the economy is very sensitive to costs and nothing but costs for companies and individuals are the planned tax increases, as well as the creation of at least two new tax figures. The paper supports everything, but it is advisable to be alert because with the inflection point in the distribution, the point of inflection in the generation could also cohabit, and convert the accounts of the Great Captain into those of the milkmaid.

Individuals' taxes have a reasonable behavior, even consistent with the estimated progress for consumption and employment (variable on which the Government does not dare to give closed figures); but those that support the companies have little justifiable advances for a growth of the economy as modest as 2.2% (nominal 3.8%). And that is precisely where the risk for economic activity lies: in the costs paid to companies, both in Corporate Tax, which grows 14.1%, and in Social Security contributions, which will rise by 7%. , 5%, in addition to an extra cost in the lowest salary range due to the elevation of the SMI. The remuneration of the salaries of unskilled workers this year will be 123 euros per 100 last year, and the same will happen with the contribution to Social Security by such workers, while the contribution by the most qualified will rise in a 7%

The Government has wanted to pass the bill of redistribution to companies, and wants to continue practicing it in successive years on the same loins. The finance minister yesterday was very explicit: "The fiscal pressure has to be closer to the Union average; we will see how the income contributed by the companies behaves this year, and we will act accordingly, both in the type as in the deductions and exemptions; but the logical thing is that they pay as in Europe, because it is in Societies where there is the differential of the fiscal pressure; It can not be that a large corporation pays less taxes than a self-employed or one of its employees. "

Also from here we have argued that the future welfare state needs more resources and that inevitable seem higher taxes. Another question is where do they get to not stop the machinery of generating wealth, without which there is no distribution worth. We would all like a Nordic state in expenses and income, but achieving it with a Mediterranean economy will cost a lot of time.

This Budget is, in any case, written in the water because of the difficulties to get it out in the Parliament, where the Government has the same options as Madrid, ten points from Barça, to win this league. Sánchez's intentions are explicit: an intense social turn with due respect for fiscal discipline, two faces whose coined in the same currency is increasingly complicated by the slowdown of the economic cycle. Social change is optional and Sánchez has made it his own because his first objective is to achieve the electoral blessing he lacks. But fiscal rigor is mandatory if we want the market to refinance at a good price the 209,000 million that the Treasury has to issue and the additional 200,000 that private agents have on loan from foreign investors and that must also be refinanced. Treasury expects with a minimum conviction a deficit of 1.3%, yearns for 1.8%, and is exposed to 2.4% if it has to extend Rajoy's accounts.


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