A little more fine fiscal surgery, please.

It's very easy to engage in demagoguery when it comes to taxation. On the one hand, nobody wants to pay taxes voluntarily, despite knowing that if we all refuse, we'll probably all end up losing. On the other hand, things are sometimes quite complicated due to the very legislation itself, which, in its attempt to be refined, becomes very complex, and in the end, some analysts opt for a simplification that serves to argue in favor of abolishing taxes. They often do so by arguing lower your arms Faced with regional tax dumping, the existence of the state tax is overlooked. And sometimes, there is some hidden interest at play, since for the good of the economy These are proposals that always benefit the most powerful classes. For example, based on the idea that taxes are confiscatory, they call for the abolition of the wealth tax, without much consideration of the overall tax system for income and wealth, income from work and capital, or productive and non-productive assets, when in fact, the maximum taxable income for income and wealth is capped at 60%.

It may seem like a lot or a little, but in no case is it confiscatory, as the Constitution requires, just as it requires the taxation of wealth. They don't advocate for raising the tax-free threshold or for a minimum tax on capital. Or, regarding inheritance tax, they call for its elimination based on the idea that the heir must renounce certain inheritances due to tax implications—of course, positive testate estates—when it's obvious that what the heir wants is to receive the inheritance free of encumbrances. Or when discussing where the limit should be placed at which the marginal income disincentive harmfully discourages work.

Another issue that creates bottlenecks is that of the expadosdue to a tax system that supposedly limits the attraction of talent. Since wealth tax is personal in nature, it certainly...expanded Anyone wishing to return to Spain or reside in the country must declare their assets, both from here and abroad, here. But before proposing the elimination of the tax for everyone, we could consider continuing to work on determining who is a tax resident for these purposes after a certain number of years of return. If this were accompanied by an effective tax, after this period, that only levied unproductive assets, the incentive would shift towards declaring assets in the country, with wealth flowing into productive investments. We could also revive the idea that capital gains accumulated over the medium and long term (5 or 12 years) should receive more lenient tax treatment. After all, the proposal to define nationality is symmetrical to the proposal many regional governments are currently making to prohibit the accrual of monetary social benefits without a minimum number of years of legal residency.

Let us also note that Spain offers a 99% corporate tax credit for venture capital companies. This precedent demonstrates that the system accepts aggressive tax incentives, although these are very poorly defined in this instance. A similar or smaller corporate tax break—between 50% and 75%—would be better for companies in technology and high value-added sectors that establish themselves in the country, conditional on: (i) real and sustained investment; (ii) the creation of skilled jobs; (iii) a medium- to long-term presence (minimum 5-7 years); and (iv) genuine business activity, not merely tax structures. Ultimately, the aim is to promote the creation of companies in sectors that are strategic for our economy and the capitalization of those with real economic activity that create jobs and reinvest their profits in productive assets.

More support than current capitalization funds allow for reinvestment by the quintessentially Catalan company that reinvests practically all of its profits should be prioritized over the lax tax protection currently enjoyed by family businesses. In this regard, it's worth considering redefining the concept of family businesses by linking their tax benefits to the effective control of the share capital by a family group. Conversely, the tax deduction for external debt could be significantly limited, particularly for those who distribute dividends by increasing debt, which is currently subsidized. Unrealized capital gains could also be taxed only to the extent that they exceed investments made or held in non-productive assets. Consider alternatives before abolishing taxes or rendering them meaningless.

It's also a classic tactic of anti-tax advocates to demand reduced rates for everything that affects them fiscally, and then make liberal pronouncements against inefficient taxation because it distorts resource allocation. Furthermore, the analysis is based solely on nominal tax rates for assets, goods, or services, without considering the full range of taxes levied on those bases, whether on physical assets versus financial assets, on corporate professionals versus those taxed as individuals, or on tourism industry services compared to other economic activities.

Tax reform requires more subtle surgery than demagogic political maneuvering, using arguments that undermine the funding of the welfare state and, under the guise of a misleading productive efficiency, increase social inequality and delegitimize the very system of the market economy.