Sánchez reaffirms that the minimum wage is taxable despite the lack of support

Madrid"There is nothing that we have not solved." With these words a member of the Spanish government showed on Wednesday afternoon that the Clash between PSOE and Sumar over taxation of the new minimum interprofessional wage (SMI) The IRPF (personal income tax) must be redirected in some way. But it is still too early to know if the Ministry of Finance will move: Sumar believes that María Jesús Montero will have to back down and in the socialist ranks there are those who do not rule it out, but the Moncloa for the moment reaffirms the decision taken. And that is despite the fact that the great majority of parties in Congress have shown themselves against workers who receive the minimum wage having to pay IRPF. The Spanish president, Pedro Sánchez, spoke about this during the first control session of the year in Congress and acknowledged that there is "debate" within the coalition, although in the corridors he denied any crisis with his minority partner in the government. Sánchez and the second vice president, Yolanda Díaz, smiled from their seats to try to reduce the tension on Tuesday. It would have been different if Montero had also attended the chamber, but she was absent due to a fever.

This afternoon, the Moncloa has conveyed to the media the reasons why workers should pay personal income tax: the purchasing power of workers is also increasing – they calculate that a single person without children would earn 400 euros net more than last year – and that it is necessary to "promote a tax culture" rather than paying taxes. Within the PSOE itself, it is not understood that, yesterday Tuesday morning, the Treasury announced the changes on the same day that the Spanish government could celebrate a new increase in the SMI. The ministers Yolanda Díaz and Pilar Alegría staged the clash in the Council of Ministers room, with the Minister of Labor openly airing her disagreements, and the spokesperson clarifying them. Only a few minutes earlier, during the meeting of the parliamentary groups of the PSOE in Congress, the Senate and the European Parliament, Sánchez informed his people that they should make a communicative effort and fight the battle against X to "explain, explain, repeat and repeat" on social media their initiatives in the chambers and also in the government. All this, to counteract the power of the extreme right on social media.

Montero, pre-candidate in Andalusia

As the main suspect, the Minister of Finance, María Jesús Montero, has been left in a delicate situation. In everything that surrounds her from now on, it must be taken into account that she is the PSOE's pre-candidate in the 2026 elections in Andalusia. A community that, precisely, is the second in the State where more people receive the SMI. In Congress, a parliamentary majority is being forged in favour of revoking the decision of the Treasury: PP, Sumar and Podemos have already presented initiatives in this regard and ERC, EH Bildu and BNG also disagree with making those receiving the SMI pay taxes, instead of raising taxes on the highest incomes. This Wednesday, the spokesperson for Junts joined in: Míriam Nogueras considers that the "image of insolvency, lack of rigour and chaos even reinforces Junts' position on distrust of the government". Despite making it clear that they are opposed to lowering the minimum wage, Nogueras has stressed that the "core point is the cost of living" and has regretted that living in Catalonia is "8 percent more expensive than the Spanish average."

Sumar sources believe that the PSOE has already lost this battle and that it will rectify even before the bills that have been presented have to be voted on. Likewise, Díaz maintains that she respects the powers that the Treasury has in tax matters and that, therefore, she does not intend to reopen an internal negotiation within the Spanish government. Rather, those around her believe that the measure will fall by its own weight given the strong opposition it has generated among the other parties. In the PSOE they do not rule out that they will end up retracting, but they believe that it is still early and that they must let the days pass to try to educate people about what Montero proposes. They call it "populism and brother-in-lawism "fiscal" certain postulates and defend that fiscal progressivity consists of "everyone contributing to the extent that they can." And in this case, they emphasize that the recipients of the SMI should pay little and that, even, in the income tax return they would probably have to pay a refund. The problem, they admit from the socialist ranks, is not.

Did Díaz know that the increase in the SMI included taxation? The Minister of Economy, Carlos Cuerpo, has noted that the report of the experts - led by the Ministry of Labour but with the presence of other ministries - who in January raised the options for an increase already anticipated that it would be accompanied by a retention in the IRPF. From the Ministry of Labour they point out that the technicians always do it this way. Why? Because they cannot work on a legislative change - that of raising the exempt minimum in the IRPF - that does not yet exist. What happens every year is that the experts make a report stating that the new SMI should be taxed if it exceeds the threshold currently established and, subsequently, there is a political agreement for the Treasury to increase the exempt minimum. In this way, the SMI does not reach the new threshold and should not be taxed. However, this time the Treasury has taken the right path and has not raised it, denounced those close to Díaz.

Meanwhile, the PP admits that it wants to "enjoy the show" that the PSOE and Sumar are starring in. They dream of the hypothetical scenario that an initiative to revoke the changes in the Treasury is approved in Congress and that the ministry, alleging reasons of budgetary deviation, vetoes an initiative by its minority partner. The Spanish government hopes not to have to reach this point. During the debate, Sánchez wanted to cut the PP's attacks short and criticised the fact that, when the conservatives were in power, the minimum wage was not touched. "Now I understand why when they were in power they froze the SMI, so that it would not be withheld in the IRPF. They thought it was better to live on 730 euros a month as they left it in 2018 than on the 1,184 euros we are leaving it at now," he stressed, "I was with him," he added: "We have this debate. Far from supporting the increases in the SMI, Feijóo has wanted to butt in on the disagreements within the coalition: "Keeping half of the increase in the SMI is neither progressive nor social justice."