- The Tax on the Income of Natural Persons will once again be deflated by the Basque Government from 1 January, this time 5.5%, as announced by Iñigo Urkullu in the Basque Parliament. For many experts and economists, this measure will only increase social inequalities, especially because it affects those who earn the most.
The Lehendakari of the Basque Country, Iñigo Urkullu, has announced at the General Policy Plenary of the Basque Parliament a series of measures to deal with the current crisis situation. For example, to increase social emergency aid by 10%, due to increased inflation, to launch the food bonus to compensate for small trade or to strengthen the aid programme for the promotion of renewable energies. To this end, the Basque Government plans to allocate EUR 400 million through the agreed programme. Of course it's a lot of money, but not enough. VAT stations in Bilbao (495 million) and Vitoria-Gasteiz (555 million) cost more.
The deflation of income tax is a way to mitigate the increase in inflation, but it will benefit those who declare more money.
Lehendakari comes with his usual prescription. As Ainhoa Etxaide has pointed out in this media, it offers nothing but compensatory and assistance aid, but measures that would entail a profound change in the model. For example, it has something to do with taxation. The Government of Spain, the European Commission and the International Monetary Fund are studying the increase in taxation of energy companies and major fortunes. On the contrary, in Álava, Bizkaia and Gipuzkoa they will not “get into the fishing of the rich”, according to Bingen Zupiria, spokesman for the government. In these territories, the haciendas barely raise 150 million euros through the Wealth Tax.
Only one of the eight measures announced in Parliament relates to taxation: the third, as from 1 January, will deflate the Personal Income Tax (IRPF), this time 5.5%. By reducing the profit rate, the taxpayer moves to the previous tranche and pays a lower rate. It is a way of mitigating the increase in inflation. But what's deflated is not even half of inflation. In addition, as the economist Jon Bernat Zubiri recalled in Hordago, many do not win or make a declaration of income, while low- and middle-income people will barely notice it, they will benefit those who declare the most money. In other words, it will increase social inequalities.
In the Spanish state, Alberto Núñez Feitó, leader of the PP, has been the one who most talked about deflation within the tax relief policy. But Pedro Sánchez's government refuses. That is why it is surprising to see Idoia Mendia (PSE) now accepting such a measure. Or, as Mitxel Lakuntza of ELA denounced in the Basque Country Irratia, the Basque Government is “more on the right” than the PP, EB and IMF?