The president of the Generalitat, Ximo Puig, has taken advantage of the general policy debate that is being held this week in the Corts Valencianes to announce a “progressive” tax reform that contrasts with those that he has described as “elitist” – in reference to those that they are carried out in autonomous communities governed by the Popular Party, such as the cases of Isabel Díaz Ayuso in the Community of Madrid and, more recently, the one announced just a few days ago by Juanma Moreno Bonilla in Andalusia. It is about, announced the head of the Consell, to “benefit families with less income” and to “improve the redistribution of wealth and progressivity”.
This Consell tax reform is designed to “reduce the impact of inflation only on the middle and working classes”, which, as Puig has announced, will see their tax bill reduced with three different measures: a new personal income tax rate, an increase in tax-exempt minimums and increase in deductions, their amount and the income limits to access them
With this tax reform in the autonomous section of personal income tax “we are going to benefit exclusively the average and working income of up to 60,000 euros”, which represents 97.4% of Valencian taxpayers, “who are going to save with the reform as a whole close to 150 million euros (€111/savings per declaration on average)”. “And especially for taxpayers with a taxable base of less than 30,000 euros (only this group will save 101 of the 150 million euros that the reform as a whole will entail)”, the president stressed.
For high incomes -those above 60,000 euros- “unlike what happens in Madrid and Andalusia -where these population groups are the main beneficiaries of their tax reforms- the impact on the Valencian Community will be neutral and will not be seen benefited.
Therefore, as the head of the Consell has defended, in the face of the tax reform proposed by other communities, with tax cuts “that only benefit the upper classes, who stop paying and reduce resources for fundamental public services” , the Generalitat Valenciana has promoted a fiscal reform “from responsibility, guaranteeing that those who have the most resources continue to contribute to the common fund”.
Thus, for example, the Valencian working class will save 94.45 euros and the middle class 67 euros, while the upper class Valencians will neither benefit nor suffer from this measure.
“We therefore follow the recommendations of international organizations such as the International Monetary Fund or the European Commission itself, which have demanded an exercise of responsibility from governments and have rejected massive tax cuts and only bet on selective cuts focused on groups. of the population most affected by the rise in interest rates or the increase in the cost of living due to inflation”.
“What taxes are lowered and for what”
Because the debate, the president continued, “is not and can never be whether taxes are raised or lowered, but what taxes are lowered, who is lowered and why they are lowered. And the Botànic proposes a reform where taxes are lowered for the middle and working classes, to help them cope with inflation and prevent them from being the most affected, while demanding a fiscal effort equal to that of other years to the highest incomes , who have savings of zero euros”.
In addition to the new regional rate, which lightens the tax pressure for income of up to 60,000 euros, the Consell has also raised the minimum exempt from personal and family taxation, which are the resources that any person needs to survive and that are outside the tax .
This exempt amount was raised to the maximum allowed by law, 10% more, “well above the 4.1% announced by Madrid and 4.3% in Andalusia.” “Compared to the 5,500 euros that any taxpayer had as a minimum exempt until now in their income statement, we have made the effort to increase this amount to 6,105 euros, to which must be added the additional exempt amounts that each taxpayer adds by each child, ascendant or dependent in their charge and whose amounts have also increased by 10%”, explained the head of the Consell.
This supposes, he points out, “a double benefit”. “On the one hand, it will allow all citizens to have more resources to face rising prices to guarantee their subsistence, allowing a greater part of their resources not to be taxed; and, on the other hand, that there are 33,000 more Valencians who will have a zero quota. In other words, they will pay zero euros for personal income tax”, he defended.
962,000 will not pay any personal income tax
In fact, he has insisted that thanks to the reform of the Botànic “there are already 962,000 Valencians with fewer resources who will not have to pay any personal income tax, zero euros”. In addition, he has stressed that the amount, the beneficiaries and the number of regional deductions are increased “so that those Valencians from the middle and working classes who have to declare personal income tax do so for the least amount possible.”
“We are already one of the autonomies with the largest number and amount of deductions, about thirty, which have allowed 1.3 million Valencians to save more than 280 million euros in recent years”, Puig highlighted, who has He added that, however, “we are also going to adapt them to the impact of inflation.”
In this way, the amount of all of them will be increased by 10% (for example, deduction per child goes from 270 to 300 euros) and also extends the income limits to access the deductions of the Generalitat (from 25,000 to 30,000 euros in the case of individual declarations and from 40,000 to 47,000 euros in the rest), “a decision that benefits middle-class taxpayers who until now could not access deductions, but thanks to the reform they will be able to”.
Similarly, new deductions are included on two important issues: access to assisted reproduction for women over 40 years of age whose treatments are not covered by social security up to a maximum of 100 euros and a new deduction to help cope with the increase in interest rates on mortgages subscribed from January 1, 2014, up to an annual maximum of 100 euros.
Some measures that, according to the head of the Consell, will place the Valencian Community “at the head of the progressivity of this tax and the redistribution of wealth, basic principles on which taxes should be based”. “Our objective is and must always be to guarantee quality public services and adequate coverage for all those families with fewer resources, defending equal opportunities and, for this, the greatest fiscal effort must fall on the highest incomes while we still alleviate plus the tax bill of average and working incomes”, said Puig.
An example of this, the president has related, is that the Generalitat is going to maintain the Wealth Tax in its entirety, “which, unlike personal income tax, only the 27,000 richest Valencians have to pay, 0.48% of the taxpayers”. A tax for which the Generalitat will collect in this 2022 about 200 million euros. “We maintain taxes on the highest incomes while reducing the tax burden on middle and working incomes,” he concluded.