The taxation in the budgets divides the partners of the Government in the Parlament

With the negotiation of the next budgets of the Generalitat on hold due to the crisis of the Government of ERC and Junts, the partners of the Catalan Executive had no qualms about showing yesterday in Parliament the differences they also have on fiscal policy that they see more suitable for Catalonia.

Thomas Osborne
Thomas Osborne
06 October 2022 Thursday 19:30
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The taxation in the budgets divides the partners of the Government in the Parlament

With the negotiation of the next budgets of the Generalitat on hold due to the crisis of the Government of ERC and Junts, the partners of the Catalan Executive had no qualms about showing yesterday in Parliament the differences they also have on fiscal policy that they see more suitable for Catalonia. While the Republicans closed the door on possible tax cuts, the postconvergents showed their sympathy towards this prescription.

The differences between the partners surfaced when they positioned themselves differently in two motions – mere declarations of intent that are voted on in plenary at the proposal of the groups – of PSC-Units and En Comú Podem, which outlined, in broad lines, the paths by which In his opinion, the next Catalan budgets should be discussed, as well as the tax treatment.

The motion of the commons urged the Government to "reject the dynamics of tax reductions and dumping of some autonomous communities", and ERC voted in favor together with the PSC and the formation of Jéssica Albiach, but Junts abstained. On the other hand, in the motion of the PSC, which summoned the Government to "apply the criterion of fiscal prudence avoiding increases in tax rates", the post-convergents reached an agreement with the Socialists to eliminate the ending "avoiding tax reductions" from the final wording. That allowed them to add their votes to the PSC, while the ERC and the commons positioned themselves against it.

Taxation has become one of the workhorses of the elaboration of the next budgets of the Generalitat, fueled by the debate generated by the announcements of tax reductions of the autonomous communities of the PP. This competition between territories has fueled the discussion in Catalonia, causing the formations that currently make up the Government to show publicly that they have different fiscal models: the social democrat of ERC and the liberal of Junts.

Thus, President Pere Aragonès has been at all times opposed to lowering taxes in Catalonia and Junts has been flirting with an idea encouraged by employers such as Foment del Treball, in favor of lowering taxes such as Heritage.

With the votes of the Parliament, Junts reopens the door to tax reductions, contrary to what its partner thinks, who sees no room for it despite the inflation crisis. In fact, in yesterday's debate in Parliament, the Republicans made it clear that they would only be in favor of a reduction in personal income tax for the lowest incomes if the situation allowed it, which in their opinion is not the case. The ERC deputy Juli Fernández remarked that "this is not the time to make tax cuts to the richest", while the Junts Jordi Munell pointed out that his party's commitment is to "work to reverse the tax increases".

While the crisis in the Government is not resolved, the budgets are still up in the air. The commons are the priority partner with which to move them forward, but the Minister of Economy, Jaume Giró, has also opened the game with the PSC. The pause has consequences. The accounts of Barcelona are also paralyzed and there are those who assume that those of the Generalitat have complicated their approval in a timely manner.