Independent taxation and the Transition

BarcelonaThe unexpected intervention of former Catalan president Jordi Pujol at an event organised by ARA, in which four Catalan finance ministers spoke about the underfinancing of Catalonia, have brought back to the table the debate on whether the Generalitat missed the opportunity to demand its own taxation system during the Transition. Beyond the responsibility of this or that political representative or the veracity of the Spanish government's alleged offer, the fact is that the independent taxation was not on the Catalan nationalist agenda at the time. In the minds of the Catalan politicians of the time, there were other priorities, such as, for example, putting self-government on the fast track and obtaining tools to be able to protect the Catalan language. Few people, with the exception of Trias Fargas, had seriously studied the question of financing.

And there was another very important factor that explains why left-wing forces, hegemonic in the period 1977-1980, did not want to turn it into a battlefield. For both the PSC and the PSUC, led by Josep Benet, migration was of capital importance in the discourse of Catalan nationalism. There was therefore a lively awareness that Catalonia had to show solidarity with the rest of Spain. It was not in vain that in the 1960s and 1970s more than a million people arrived from other parts of Spain to escape extreme poverty. There was also a conviction that Catalonia had to act as the driver of the system of autonomous regions, which would have to be phased out to the rest of the country, meaning an independent system would make no sense. If we add to all this the reluctance of important nationalist leaders to assuming the wear and tear of collecting taxes in a context of economic crisis, the result was that independent taxation did not figure among the main Catalan demands of the time.

Be that as it may, what was originally an act of responsibility to facilitate the agreement and to show the way to the rest of Spain turned against Catalonia. The common system ended up becoming a straitjacket, a burden that led to a huge fiscal deficit that prevented sufficient funding for the services, such as health and education, which were the responsibility of regional governments. It was only through tough negotiations with the central state and by approving a new Statute of Autonomy in 2006 that small improvements were achieved which, however, did not compensate for the initial imbalance.

The result is that Catalonia has been underfinanced for the last four decades, and this was one of the reasons that sparked the independence bid. The most serious thing, however, is that once Catalonia's patience ran out, no Spanish government dared to reform it. The current system has been outdated since 2014, and there is nothing to suggest that an agreement for independent taxation will be reached any time soon. Seen in this light, it is obvious that not pushing this demand during the Transition was a mistake. A mistake caused by good faith and a solidarity that will never be recognised in the State.