The tax pressure on high incomes in Catalonia will grow by 2% next year with the implementation of the new tax on large fortunes from the central government. Something similar will happen to a greater or lesser extent in another seven communities. Although the main objective of the new tax was to tax high net worth in those communities where the regional tax was subsidized to 100%, the high tax rates have caused that in communities like Catalonia –where the most is collected– there are some taxpayers who will see their bill increase fiscal.
Specifically, there will be around 290, according to estimates by the Department of Economy, directed by Natàlia Mas. The extra global collection that the Generalitat calculates that the State would obtain with the new tax in the community is about 12 million euros. That means 2% more than the 547 million that Catalan taxpayers paid on account of the wealth tax in 2020, the latest with available data. If it is compared with the estimated collection in Patrimony for this year, the increase in the tax burden is somewhat less than the aforementioned 2%.
According to Fedea estimates, the new tax will obviously affect communities that have 100% discount, such as Madrid or Andalusia, but also nine other regions where it is already paid: Galicia, Asturias, Cantabria, Murcia, the Balearic Islands, Navarra and País. Basque. In the case of Catalonia, for example, Fedea calculates that the state tax will be activated for taxpayers with assets of more than 17.5 million (see attached graph). The projections made by Funcas and Fedea on how much a taxpayer in Catalonia should pay for this new tax with a heritage of 40 million rises to more than 168,000 euros. It is 17% more than what they paid so far for Patrimony.
Based on the estimates of potential collection made by the Generalitat, on average the 290 taxpayers who will pay the new tax will have an extra fee of some 41,000 euros. Economy recalled that the theoretical analyzes do not take into account that the law establishes that what is paid jointly by personal income tax and the wealth tax or solidarity tax cannot exceed 60% of the tax base of that taxpayer.
The theoretical collection of the new tax throughout Spain is expected to be 1,500 million euros per year. One option that the 10 autonomous communities that will be affected by the new tax would have would be to raise their rates in the Heritage tax to retain the extra income, since the collection of the new tax figure will go entirely to the State. Sources from the Department of Economy of the Generalitat said that "at the moment we are only studying it to assess what we do."
Fedea researcher Diego Martínez, who is one of the co-authors of the study, explains that from a financial point of view it would make sense for the regional governments to raise taxes to collect the extra income that was generated, but from a political point of view it is watch. Martínez recalls that in the communities where it is 100% subsidized, taxpayers with high net worth but less than 3.7 million will continue without paying Patrimony. Therefore, the 100% bonus will continue to be attractive to a large group of high-income taxpayers.
With the official data published by the Tax Agency, it is not possible to know how many Madrid and Galician taxpayers with millionaire assets (but not exceeding 3.7 million) will be spared from contributing to solidarity with the tax approved in the Congress of Deputies and that it is pending the process of the Senate.
For this reason, it seems difficult to reverse the tax relocation process to Madrid that has taken place in recent years in search of a lower or non-existent tax burden on certain taxes. Taxation for certain high incomes continues to be more attractive in the capital.
Diego Martínez also recalls that the communities through the Sufficiency Fund that is incorporated into the financing model already receive compensation on account of the Heritage tax that has been maintained since its elimination in 2008 and that was not abolished when the Government of José Luis Rodríguez Zapatero reintroduced it. There is no data on the amount of compensation.
The Wealth Tax was created in 1977 with an “exceptional and transitory nature” –the Fedea researchers explain– although it became definitive in June 1991. Later, in 2008, it was eliminated. The tax was recovered in 2011 without eliminating the compensation. Fedea maintains that the common regime communities "have been receiving resources by way of the Wealth Tax." From 2022, the tribute has an indefinite character.
As for the Basque Country – where the Heritage tax does exist – it is possible that the new state tax will not be applied in the end. The regional government negotiates its application with the central government.
