Summary
Economic crisis in the Spanish Government undertakes a way of raising taxes to try to maintain consumption with social measures without increasing the deficit at a level insurmountable.
Notwithstanding that higher taxes, especially VAT, does not seem well designed and that certain errors persist, health, and instead do not raise taxes to record the highest incomes.
Analysis
The political fall beginning in Spain is marked by the draft national budget, and with this, increases in certain taxes. The Government argues that the goal is to maintain social justice and that the lower classes can withstand the crisis. The measure in principle is designed to look correct several deficiencies:
- The VAT, as an indirect tax that is affecting all consumers regardless of the kind to which they belong and, therefore, is a recovery decision. For this reason, the main argument redistributive justice can not be said that is enforced.
- Secondly, changes in the tax affect the entire industry that works with and for the public administration, infrastructure and health for example, and each time undergoes a modification causes serious problems in administrative and profitability of companies in these sectors.
- It misses in this reform, the increase in taxation for higher incomes, especially capital income of enterprise assets of the wealthiest taxpayers. Also, there have appeared finalists environmental taxes penalize the consumption of those products that pollute and damage the environment.
However, this tax proposal is just beginning of a journey that must be adopted later this year and, after negotiating with other political parties for their approval, will surely be amended by incorporating the requirements of these games.
In short, are these changes proposed by the Government are sufficient to endure this time of crisis?
Can he political opposition Popular Party, to assume their role and present coherent alternatives that may be taken up and helps the Government to improve your project?
Can he political opposition Popular Party, to assume their role and present coherent alternatives that may be taken up and helps the Government to improve your project?
It's time to prove that Spain is no different and are able to join forces to overcome a crisis that affects them, because of a production model based on housing, rather than to other countries.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
