More than 4,300 rich people pay the controversial wealth tax in Tarragona
It is one of the most controversial tax figures, despite the little effect on the population. wealth tax, a tribute ceded to the communities and that in Tarragona is paid by around 4,300 taxpayers, is back in the spotlight. The president of the Junta de Andalucía, Juan Manuel Moreno Bonilla, has announced the suppression of it, following in the footsteps of the Community of Madrid. The tribute only affects 0.5% of citizens in the province, but generates lots of noise around you. The figure is more or less stable, although it tends to slight increase over the years.
During 2021, there were 1,979 returns filed at the Tarragona management office, 1,431 at the Reus office and 977 at the Tortosa office, according to the data extracted from the 2021 report of the Tax Agency of Catalonia.
Catalonia paid 45% of the wealth tax in Spain in 2020, according to the latest statistics available from the Tax Agency. More than 80,000 Catalan filers paid 546 million eurosof the total of 1,203 that were collected throughout the State. Behind is the Valencian Community, with 156 million, 13% of the global balance.
Together proposed a discount
State regulations establish a exempt minimum tax of 700,000 euros, despite the fact that some communities have reduced it so that more people have to contribute. This is the case, for example, of Catalonia, which places it at 500,000 euros, the same as the Valencian Community, hence they are the regions that collect the most.
Catalonia paid in 2020 45% of the wealth tax in Spain. The Catalans paid 546 million of the total of 1,203 collected
The recent change of Government in Catalonia may affect the future of this tax figure. The former Minister of Economy, Jaume Giró, proposed increase the minimum equity from which to pay from those 500,000 euros to 700,000. It was before his departure, after the departure of Junts from the executive, leaving ERC as the only ruling party. What the Generalitat rules out is to abolish this taxat least as long as the current financing system is maintained.
The economist and researcher Roger Medina, from the Institut Ostrom, believes in the convenience of abolishing this tax. “It is a tribute that does not exist in these terms in many European countries and that generates certain execution and design problems. For Catalonia it means some considerable income but I think it should not exist, and not to defend the interests of the rich, "says Medina.
"Does not meet standards"
This expert believes that the tax "does not meet tax standards" and gives some examples: «A burden is being placed not on an annual income but on the elements integrated into a heritage. There may be cases in which it has been inherited and there is no liquidity, high cash flowand you can't afford those payments. One thing is to pay on the value and another on the fruits, the performance it gives, and there it can cause problems. Medina for a suppression that can be compensated with other figures, if you want to maintain the collection.
Benja Anglès, Professor of Tax and Financial Law at the UOC, believes that "although the abolition of the tax only affects individuals, since it does not tax companies, certainly eliminating some regional taxes, such as wealth or inheritance, can influence some people when choosing where to fix their tax residence».
In Catalonia, the minimum exempt from which it is paid is 500,000 euros. The exconseller Giró (Junts) wanted to raise it to 700,000
This inequality between territories also gives rise to a strategy, that of the transfer of domicile, which also includes a change of residence that can be done in a simulated way. "A change of registration to a municipality outside of Catalonia is processed, but most of the year continues to reside here, considering that it is not always easy to demonstrate where a person really resides on a daily basis," explains Anglès from the UOC . That's where the door opens “one of the main inspection routes of tax administrations, to show where taxpayers really live.
Race between autonomies?
The abolition of the wealth tax in Andalusia and its 50% discount in Galicia have contributed to highlighting this figure. "I don't think that the response to a tax cut for a certain autonomy is a race for the rest, because in the end it all depends on the level of expenses you want to have and of what citizens are willing to put up with”, indicates the teacher.
But beyond the relevance or not of this tribute and its media controversy, Anglès believes that «the regional financing model should be reviewed and updated to guarantee minimum public services and a similar fiscal effort for all citizens.
The UOC professor considers that the "alleged tax competition between communities is a poisoned debate», firstly because «the weight of regional taxation compared to that of the State is relatively small». The main taxes –IRPF, Corporations and VAT– are state taxes, and practically the same throughout Spain.
Second, there is the legal framework as background scenario. «Establishing more or less regional taxes is a lawful and legal decision in accordance with the current constitutional framework that guarantees the financial autonomy of the communities”, says Anglès. Finally, there are the ballot boxes as a definitive instrument to opt for one model or another: "It is the citizens who, through their vote, choose their rulers and validate the public policies that are promoted, and also their expenses."