ELA demands European tax harmonisation

Dec 18, 2020
The lack of tax harmonisation in direct taxes is designed to encourage tax dumping. ELA demands that tax harmonisation for these taxes must be tackled in Europe and that the decisions must be taken by the institutions in the ACBC and Navarra.

Due to the General State Budget discussions, ERC has agreed with the Spanish Government to study a comprehensive tax reform and to create a specific work group for tax reform on large fortunes. The reactions from the neoliberal right wing parties were not long in coming. Politicians and capitalists have labelled the step as an attack on freedom and on Madrid. This same line has been followed by certain areas of the media, which have brought out front page headlines such as “Tax attack on Madrid”. However, the reality is that the Community of Madrid applies a tax dumping ground with the other autonomous regions, that is to say, unfair competition due to the elimination of wealth tax. In this way, the large holders, capitalists and multimillionaires do not pay a euro in taxes on their assets, which is highly unfair from the social justice point of view. An injustice that leads to the concentration of the rich in the capital city of Spain, with the rest of the country losing out.

In this debate, the tax regimes of the ACBC and Navarra have been indicated as showing a lack of solidarity under the pretext of equality by those who advocate unifying the entire State. ELA champions the defence of the Agreement and the Economic Agreement, since they are tools of economic sovereignty in Euskal Herria. Additionally, we are calling for the competences on this subject to be decided completely by the Basque Government or if such is the case, the Government of Navarra.

However, defence of the competences on the subject of taxes does not mean agreeing with the model in force in the historic territories. In the Provincial Councils and in Navarra few taxes are collected and this is done badly. On the one hand, the tax pressure is very low in comparison with the EU; and on the other, it is the work revenue that keeps the public coffers full. Capital revenue pays very little tax (they are at the bottom in Europe); in addition to the fact that the evolution during recent years shows that they are contributing less and less, thanks to steps applied that favour those who have the most. This is framed within the logic of making this territory into a ‘low cost’ space for high incomes, companies and capital. Without going any further, eliminating wealth tax, the same that Madrid is being accused of now, is a law that was in force for some years in the ACBC.

As a result of all the above, amongst other questions, ELA believes tax harmonisation that is increased to European level in direct taxes to be necessary. There must be a minimum rate both for corporate tax and for other taxes (income tax, wealth tax, etc) in all countries, in order to ensure companies or people do not go to a country to obtain a lower tax rate. These minimum rates must be high, to guarantee fiscal and social justice. Additionally, the current situation demands higher tax collection to face up to the social expenses derived from the existing economic crisis. For this reason, it is more necessary now than ever to tackle taxation, not only in Euskal Herria, but also on a European scale.