Sunday, April 21, 2024

The Government Plans To Eliminate Aid For Joint Taxation

The Government plans to eliminate “gradually” the reduction by joint taxation in personal income tax, considering that it “creates a disincentive to the participation of the second income earner”, who are usually women.

The measure, which aims to promote the incorporation of women into work, is included in the Recovery, Transformation and Resilience Plan sent to Brussels for economic reconstruction after the Covid crisis, El País announced yesterday, and will be adopted through the establishment of a transitional regime.

It benefits two million households and its annual cost amounts, according to the latest General State Budgets, to 1,000 million euros . “It includes the gradual disappearance of the reduction by joint taxation through the establishment of a transitory regime, because it generates a disincentive to the labor participation of the second income earner (mainly women),” the document indicates.

According to the Plan, “a modern tax system should not serve exclusively to provide income that finances public spending, but should contribute directly to enhancing the impact of public policies, serving as a catalyst to achieve transformations in areas such as gender equality , the attention to the disability, the conservation of the environment or the protection of the health “.

“There is quite a consensus that this measure discourages the entry of women into the labor market, ” they indicate from the Treasury .

The reduction by joint taxation of personal income tax depends on the type of family unit and especially benefits middle and high incomes . In the case of those made up of both spouses and, if any, minor children, as well as disabled elderly persons subject to parental authority, the tax base will be reduced by 3,400 euros per year. In single-parent family units, made up of the father or mother and disabled minor or elderly children, at € 2,150 / year.

Last year the Tax Authority (Airef) prepared a report on the tax benefits of the Spanish tax system in which, precisely, it reviewed the advantages and disadvantages of this reduction in personal income tax.

He calculated that this initiative would entail an annual loss of revenue of 2,392 million, and that it would affect up to 4.2 million people, 2.1 million households, 18% of taxpayers and 17% of families. Of course, according to this body, the tax benefit would then be distributed evenly and would not alter inequality.

Given the information about this government plan to eliminate joint personal income tax, the criticisms were swift from the entire opposition. On the one hand, the PP spokesperson in Congress, Cuca Gamarra , said that this is how “Sánchez suffocates the middle classes and families again.”

On the other hand, the leader of Más País, Iñigo Errejón , described this measure as “an error at the worst moment” because “if it is necessary to collect it, it cannot be by carrying one more weight on the shoulders of those who have less.”

And the president of Cs, Inés Arrimadas , also criticized that Sánchez celebrated Mother’s Day “by taxing four million families.”

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