2023-05-12 12:27:11
Deciding the basic parameters to configure the contribution of citizens to the treasury is not an easy task. Throughout history, all kinds of concepts have been considered as taxable objects for tax purposes, including a curious tax on men’s beards, created by Henry VIII of England in the 16th century and perfected by his daughter Elizabeth, although qualifying it. so that it was applied only to those who had a beard of at least two weeks. O well, a tax in nineteenth-century France, according to which it was paid by the number of windows that the houses had.
Apart from somewhat grotesque tax figures, a basic objective of any tax system throughout history has been to raise the necessary money to cover the needs of the treasury, marked by the common good of the communities of citizens. But, Above all, the tax system must be fairsince in no case can it be expropriatory or asymmetric based on the different segments of citizens to whom the tax levy is directed.
As is well known, in Spain, the autonomous communities (CCAA) have transferred both the taxation for the Wealth Tax (ISP) and the taxation for the Inheritance and Donations Tax (ISD), which are subsidized at 99%. in some Autonomous Communities, which tacitly implies an incentive for large fortunes to feel attracted to establishing their residence in a specific AC (such as Madrid or Andalusia) different from the one in which they have been located up to then.
On the other hand, in the town halls there is a tax of a local nature, such as the Property Tax (IBI) that in some cities, such as Madrid, it has multiplied by three or four in the last twenty yearswhich, in fact, can cost a retiree between one and two months of his pension to be able to comply with the Treasury, subtracting that money from the use of heating or the quality of his food
We could affirm, therefore, that the tax system that we have suffers from some aspects related to the taxation of property that should be corrected for the sake of greater social justice among the different categories of taxpayers, according to their wealth and income. The goal should be to properly balance income and property taxationwhich have traditionally been considered the two basic sources of collection by governments. The basic premise is that having income is not the same as having wealth.but the payment of tax levies must almost always be made through monetary payments that necessarily come from income, and if there is no income, sometimes taxpayers have no choice but to sell part of their assets, simply because they cannot maintain it and simultaneously comply with its tax obligations.
If we focus on the taxes basically collected by the CCAAs and local corporations (CCLL), we would have the following evolution for the IBI, the ISP and the ISD, as we can see in the following table:
We see that IBI increases are absolutely unjustified, since they have represented an increase of more than 85% in this period. The problem arose when the financial crisis occurred, since the income from the real estate activity accounted for the majority of municipal financing, and when the real estate bubble burst, the municipalities, which had already become used to spending a lot of money, did not give up. to this, and they decided to increase one of the few taxes they collected, as can be seen in the period 2008-2014, to then grow more moderately.
With regard to the ISP, it was practically eliminated by Zapatero in 2009, but, in 2012, Rajoy restored it (in addition to expanding other tax bases following the indications derived from the fiscal voracity of his Minister of Finance, Cristóbal Montoro). albeit with much lower revenue. It is a census tax, basically collected by the Autonomous Communities, to know the patrimony of the taxpayers, since the collection is minimal (barely 2% of the global income of the Public Administrations (AAPP)).
As for the ISD, whose management is also ceded to the CCAAs, it is usually the object of criticism by some CCAAs that charge it to all its citizens in relation to others that have it subsidized up to 99% for direct descendants, such and as we have indicated before. This supposes, logically, a fiscal asymmetry in relation to the filing of the citizens that is the source of the previous criticisms. However, it is necessary to indicate that the collection is also quite meager (around 7% of the income of the CCAAs).
On the other hand, and precisely to correct those fiscal asymmetries to which we have referred, we would have to establish two corrections to direct taxation based on personal income tax (IRPF) savings, in relation to two figures financial:
- Las bond and debenture portfolios owned by rentiers and whose coupons and capital gains are taxed at half that of earned income, since they are paying a rate of 23% from €50,000 to €200,000 and 26% from €200,000 of remuneration, which represents a rate tax that is approximately half that of work income (45% between €60,000 and €300,000 and 47% from €300,000.
- Las Variable Capital Investment Companies (SICAVs)whose model has been used up to now for large fortunes to store their movable assets with hardly any tax to the treasury, since the income received follows the accumulation principle and even the coupons and dividends they receive from their investments are not subject to withholding.
Our tax reform proposal would be based on the integration of the following tax bases:
- Wealth Tax (autonomous).
- Inheritance and Donation Tax (autonomous).
- Property Tax (local).
- Temporary Tax of Solidarity of Great Fortunes (ITSGF) (national with nuances in relation to the specific tax system of each CCAA).
- Complement to the Savings Base for fixed-income portfolios of Personal Income Tax (national and regional with an approximate percentage of 50%).
- New specific tax for SICAVs
This large tax block would make up the property tax, in a new tax that we would call General Property Tax (IGP), and that would affect both the principal of said property, as well as its yields. This new tax should suppose the elimination of the previous taxes, having to be exempt from the IGP all Spaniards whose assets are less than one million eurosequivalent to the value of a home owned, car, trousseau, savings, pension fund and a possible second home.
In the case of the bond and debenture portfolios, they would have to pay, from a global equity of one million euros, and via the IGP, an additional 22% of the income received in the year. For SICAVs, and also from one million euros of global assets of the taxpayer, a percentage indexed to the profitability obtained by the same should be established, depending on the parameters that were estimated, modifying the liquid quota of the IGP to be paid by this concept, based on the performance of the SICAV in the last three years.
It would be interesting, with regard to the management of the tax, that it be carried out with a scheme similar to that of VAT, that is, it would be collected by the State and then a percentage would be transferred to the CCAA and CCLL that would prevent a reduction in current income. of these corporations. Thus we would eliminate the bonuses made by some communities in assets and successions and that, although they correspond to the transfers made at the time from the Central Administration, they represent an undesirable asymmetry in the objective that any tax system should have, which is none other than to treat all Spanish citizens of the same way in terms of property taxation.
Obviously, the most debatable point would be in the tax level of the IGP for citizens who exceed the patrimony of one million euros (in the ITSGF it is from three million euros), as well as the necessary sensitivity of the Ministry of Finance when valuing large assets that do not generate income (castles, large estates, paintings, valuable jewels, etc.), because what cannot be sought is to obtain income from goods that do not produce it, and that, basically, what they really originate are expenses. Citizens, no matter how rich they may be, cannot be forced to sell part of their assets to pay taxes, just as, as we indicated before, retirees cannot be forced to live badly in order to pay the IBI for the fact that they own a home.
We do not intend in this article to develop a tax model with the necessary detail that it should have, but rather to emphasize the problems that our current model has and the lines of action that it should have in the coming years, with the aim of changing taxation. on property, establishing a level of IGP tax rates that would allow balancing the budgetary income and expenses of the Public Administrations, balancing income and property taxation, and obviously avoiding excessive rates being established as occurred in France, when a Tax on Great Fortunes was established with a maximum marginal rate of 75%.
The truth is that our political forefathers have a lot to do in terms of fiscal policy. The majority of Spaniards demand that, once and for all, they sit down, discuss and agree on a permanent model, with which the long-suffering citizens can plan their lives in terms of housing, investments, pension funds, etc. Taxes cannot be constantly changing, altering the forecasts of families and companies. When new elections take place, everyone who owns some property, or simply a pension fund, begins to tremble, since, whether it is the government of the left or of the right, what they are supposedly going to study is how to increase the collection , either by increasing taxes, or by eliminating deductions.
If we organize our lives by paying a mortgage for thirty years or paying a periodic premium to set up a pension fund throughout our working lives, we cannot be at the will of “people with ideas” who enter the Administration and come up with change the rules of the game for no reason in the middle of the game. Rules can be changed, but not for those who have already made their long-term decisions based on the old rules.
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