Automatically translated from Basque, translation may contain errors. More information here. Elhuyarren itzultzaile automatikoaren logoa

Tax reform or cutbacks, no other option

  • After the 2008 crisis, austerity policies were implemented, with cuts in public services and bank bailouts, all at the expense of precarizing the working and living conditions of the majority of the population. Before the COVID-19 pandemic, unemployment, temporality and partiality were at very high rates. In short, the unjust distribution of wealth generates imbalances, even in the years of economic growth.

It should be recalled that 80,000 Navarros were at risk of poverty prior to the pandemic and that almost half of those in this situation already had work. This reality affects specific people and groups more violently, such as women, people who are racialized and those who do not have Spanish nationality. In short, the pandemic has exposed a social and unsustainable system with the environment and has brought its consequences to the extreme.

And on the other hand, in Navarre there are those who have advantages: large incomes and companies. Navarre is the country that pays the least in the whole State for corporate tax, and in addition, the larger the companies, the more advantages they have. If that were not enough, the main fiscal measure adopted by the Government of Navarre in this legislature was to further alleviate the tax burden on businesses. In spite of this, the Finance Minister sees no reason to raise taxes on companies or consumers.

If tax reform is discarded, we will be forced to follow the path of cuts. The revenue forecast in Navarre is EUR 800 million less, so if the revenue is not increased, it is clear that the current budgetary level cannot be maintained. This was also the case in the 2008 crisis, when the public deficit exploded again, due to the sharp drop in revenue. This deficit became debt and the subsequent payment of the interest on the debt was a priority point at all times, before social spending. If we do not want it to be repeated, we must increase revenue, but not in any way, but fairly.

In order to find a just solution to the crisis, ALS considers it essential to mobilize society. The approach to social dialogue has always been the same: to provide funding for participants in exchange for social peace. But this approach is not suitable for workers, for example because employers have the right of veto to paralyse any agreement that goes against their interests. And, of course, the interests of the employers do not match those of the working class, even if the mantra of the "same boat" is repeated over and over again. That is one of the lies of social dialogue, the problems of the working class are not solved while promoting the interests of the employers, but at the expense of the interests of the employers.

It is pointless to discuss strategic lines and measures, if then there is no way to pay them. This has happened with the Recovery Plan of the Government of Navarra, the measures are still to be defined, but the most important thing is to clarify how the measures will be financed.

Now we have to decide who will be given priority to the interests of companies that have privileged treatment in Navarre and who pay less than in any other state country, or the interests of the majority of people, promoting public services and distributing wealth in a fairer way. It is time to decide whether to increase tax collection or to make cuts.

What is the ALS proposal? We are proposing to increase taxes on people with high incomes, on companies and on capital. Regarding Corporate Tax, remove deductions and impose a 20% surcharge on corporate income from 2019. Establish, in the area of Wealth Tax, a progressive surcharge of between 1% and 10% of the tax base. Only these measures would raise EUR 900 million in Navarre.

The influence of the decisions now being taken will be felt in the coming years and decades. Wealth can be distributed in a more equitable way, a more just society can be organized when it comes to getting out of the crisis. It is a question of priorities and political will. The proposed measures would compensate for the loss of public revenue, significantly open up social programmes and improve the productive system from a social and ecological perspective.

This review article has been posted on the ELA website and we have brought it to ARGIA with the CC by-sa license.

 

 


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