March 4, 2021

The Government gives in to Podemos and will take the rise of the IRPF to Brussels

The Government gives in to Podemos and will take the rise of the IRPF to Brussels


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The Government continues the push and pull of the budget negotiation with Unidos Podemos as the deadline for sending the wording of the accounts to Brussels for next year approaches, the budget draft that should be ready by October 15. A document that the European Commission must evaluate and in which, as sources of finance point to ABC, will include measures claimed by Unidos Podemos as the rise in income tax on labor and capital income, which the Community executive will scrutinize. Of course, the idea that the Ministry has at this time is not to include in the sketch of accounts the measures required by the retail formation in detail, but nuanced according to its parameters, with increases in Income Tax above the environment of the 140,000 euros –and not of the 120,000 claimed by the formation headed by Pablo Iglesias-as well as a tax increase in savings, but not as urgent We can.

At this point, there are differences between both parties on the maximum rate to apply on said scale: if at the moment the marginal maximum above 50,000 euros is at 23%, the proposal of Podemos is that for those who earn more than 300,000 euros is 30%. A maximum rate with which the Treasury does not agree, which wants another formula, although the negotiations are open.

The meetings happen with certain Consensus on the spending side and in taxation, where there are more differences but there is also a certain attitude of agreement. The budget draft will also include measures where the pact is absolute as the rate to the technological, in which the sources of the consulted negotiation indicate that the rate will be 3%. It is missing at this point that the Treasury begins to listen to the opinion of its nationalist allies PNV, PdeCat or ERC, since being a new tax must be processed as Bill out of Budgets, although as a measure of income will go in the budget draft. The 2018 Budgets included that by the beginning of October, the Government had to send the Courts a "Google rate" project, although this amendment was agreed at the time PP and Citizens.

Greater control over the sicav

Another point that the Treasury considers to implement, according to these sources, is to tighten the fence on investment companies with variable capital (Sicav), giving control over them to the Tax Agency instead of the National Securities Market Commission (CNMV). Until 2005, it was like that, but then the Government of Rodríguez Zapatero approved, on the initiative of CiU in the Congress, that the CNMV be the one to watch over them.

These companies, which are taxed at 1%, are collective investment with at least one hundred shareholders. However, the use of «straw straw men» in this type of signatures, the so-called "mariachi fraud" has raised criticism of these societies. Already in 2015, the PSOE had taken this point in its program and in fact, it was signed in the legislature pact that signed with Citizens. The political difference here is that Unidos Podemos wants to suppress them, with the opposition of the Treasury.

Income level

Also in the draft will be the tightening of Corporate Tax, in which the Treasury supports setting a minimum rate of 15% on the tax base of large companies, which, at the request of Podemos, will be 18% for banks and oil companies. In the taxation of dividends from abroad, Treasury is committed to reducing the 100% exemption that was approved in 2015 to introduce the 95% applied by France, a measure that goes hand in hand with the tightening up of Companies and harms the Ibex's senior staff. The PSOE had included this point in its proposal for Budgets for 2018 but Unidos Podemos wants the taxation of these gains to be even greater, even ignoring double taxation agreements. Between Treasury and training there is also willingness to raise the taxation of large fortunes – We could ask for an "ad hoc" tax – but beyond these good intentions there is no agreement or anything in the way, so this point continues in fallow.

Although the negotiation will continue beyond October 15, the intention is for the budget draft to include the master lines. Even so, the disagreements abound, especially in the necessary public revenues, especially when the Executive does not yet know if it will be able to approve its deficit path. "The big difference is in the level of resources we want to obtain in order to execute the agreements in spending. Izquierda Unida and Podemos ask for more income in the face of the reluctance of the Government », summarizes the economic head of IU, Carlos Sánchez Mato.

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