Visibly pleased with the regional financing proposal presented by Spanish Vice President María Jesús Montero, but aware that it's impossible to obtain 100% of what they want, the Catalan Minister of Economy, Alícia Romero (Caldes d'Estrac, 1976), received ARA at the Palau de la Generalitat, convinced that Catalonia will succeed. She also stated that she doesn't see it as impossible for the proposal to go ahead.

María Jesús Montero has long been waging a crusade against Madrid's "tax dumping." The First Vice President and Minister of Finance has made no secret of her support for discouraging this practice, and this Friday, within the framework of the presentation of the new regional financing modelShe has brought it up again. "It's important to set limits and [approve] mechanisms to prevent tax evasion," she said.

You can contribute your tax contributions in one autonomous community, pay taxes in another, and use the public services of a third. I know the case, for example, of a person who is a real resident of Valladolid; there he contributes his tax contributions to his office, works there, and receives income and capital gains from the resources he uses. However, he is a tax resident in Madrid, where he owns an apartment as an investment and where he occasionally travels by high-speed train. He knows what he must do to justify this to the Tax Agency, to show that he lives in the Community of Madrid at least half the year, since he pays less income and assets there. Thus, the costs of the services related to his activity are borne by Castile and León, and the Community of Madrid collects the money. But his self-declared administrative residence is in Ibiza! He travels there during the summers and on more than one weekend, because he thus benefits from transport discounts that his tax contribution doesn't help finance. As an administrative resident in the Balearic Islands, this community receives the corresponding regional funding, based on the registered population. Therefore, his residence legal It's not really anywhere. It's not where it's listed, in Valladolid: there's no family doctor here, although if you need to go in for emergencies like displaced citizenNor is it where he pays taxes, in Madrid, where, with the tax savings, he can pay for private healthcare. And it's not there where his public services are funded, but in the Balearic Islands, which receive an income without assuming any costs, since, after all, the transport subsidy is paid by the State! How can we be stuck in this frenzy of royal, fiscal, and administrative residences, without a minimum cross-check of data or identifiable responsibilities in the financing of a welfare state against which many people, like the one in the aforementioned case, practice their particular tax dumping?

It is true that to a certain extent tax dumping is used as an element of political distraction, because in the issue of financing there are other singularities, including the regional agreement, and they don't appear in our country's political discourse. But this doesn't mean that the Community of Madrid under the neo-conservative Ms. Ayuso isn't doing so. Madrid is engaging in fiscal dumping, yes. Andalusia isn't. Nor is Murcia. If these communities lower their taxes and collect less, that's their problem, because they'll have less spending capacity and won't be able to claim the equalization transfers later. To each their own. In the case of these other communities, if they use their fiscal autonomy to lower taxes, with a loss of revenue if applicable, the reduction will be real.

It was as far back as 2007 when the then Minister of Economy, Antoni Castells, put forward the need to harmonize throughout the State some of the taxes ceded to the autonomous communities, especially inheritance tax, so that there would not be a race to the bottom among all the territories. Castells was heavily criticized at the time because he incurred in an apparent contradiction: a federalist in favor of maximum fiscal sovereignty for Catalonia was demanding that the State set a limit to that sovereignty. However, the Minister pointed out that what made no sense was that a tax ceded so that the autonomous communities could better finance themselves would end up being turned into a weapon, by leaving it practically at zero, but steal tax bases, that is, taxpayers, to other territories. This is what is known as tax dumping, which is practiced on a European scale by countries such as Ireland and Luxembourg, but is particularly practiced within Spain by the Community of Madrid. This phenomenon (and nothing has ever been known about it), and now the PSC is once again championing it, as demonstrated the interview in Salvador Illa published in the ARA this Sunday, which provoked an angry reaction from Isabel Díaz Ayuso and the entire conservative press in general. Castells' reasoning was as follows: the race to the bottom to eliminate inheritance tax does not have a positive effect for everyone, but rather benefits some territories at the expense of others, and ultimately results in lower tax revenue. There is, therefore, not a virtuous circle but a vicious one.

Crossfire between Salvador Isla and Isabel Díaz Ayuso over tax dumping. The Madrid president did not hesitate to respond to the Generalitat's accusation that Madrid practices unfair downward tax competition. And the PP closes ranks with her: "They are attacking the community that contributes the most resources to the common pot," said the economic leader of the Popular Party, Juan Bravo, in a press conference this Monday. In fact, following the statements from Isla this weekend at the ARA, Ayuso has stated that Madrid contributes "70% of the common fund" of the common regime financing system (what is known as the guarantee fund). In this sense, according to the latest data available from the Ministry of Finance corresponding to the year 2023, that year the fund was funded with 116,508 million euros. 70% would mean that Madrid would have contributed more than 80,000 million, although its contribution was 17,201 million.