The electoral campaign for the regional and municipal elections has already begun. We already have a few under our democratic belt, so the prodigal spirit with which our candidates outline their proposals should not surprise us at this point. For what those who do not have cannot give, it should be emphasized that fortunately in the case of our town councils, these generally present healthy accounts to this day.
The local corporations that bring together town halls, councils, provincial and foral councils, and island councils accumulated bank deposits worth 36,600 million euros as of December 2022, according to data from the Bank of Spain, to which is added that, at the end of the past year, they have the smallest debt of all the Public Administrations (1.7% of GDP, well below the almost 24% of the autonomous communities or 102.4% of the central administration). Some encouraging data to address the spending proposals that are, however, subject to the still in force Budgetary Stability Law, in charge of ensuring that this disbursement does not skyrocket.
However, a debate that has not yet been opened is the one referring to the relative room for maneuver that our city councils have based on the taxes that they directly manage, and that allows, as established by the Local Treasury Law, to alleviate the tax burden of their neighbors. Only in the case of real estate, our town halls can apply discounts on the receipt of a powerful IBI of up to 90% for properties whose owners constitute a large family, and 95% in properties intended for limited income rental, among others. Likewise, in the case of the unstructured tax on economic activities (IAE), bonuses of 50% can be raised for the start of the activity, for the generation of jobs or for having had negative returns. Another point to take into account is that the commitment of our Public Administrations to promote changes that result in sustainable development can also help the taxpayer. An example of this is the possibility of halving the IBI or the IAE for the installation of charging points for electric vehicles.
From before the pandemic until today – from 2019 to March 2023, according to INE data – the citizenry as a whole has had to attend to a price increase of just over 13%, a fact that has laminated the purchasing power of individuals and the profit margin of broad sectors of economic activity, all within a scenario of high inflation and rising interest rates. The effort of both to adapt to this scenario should perhaps be taken into account. As we have seen, there is a certain capacity to modulate taxes. Trying to reduce the tax burden, or not, are equally feasible options, but it would be convenient to explain to citizens the reasons for choosing one or the other.
