A negotiation carried out until the last minute. With dissensions between the Government partners, causing a bizarre situation such as a vice president of the Government launching an advocate to the president to knock down the Budgets. In the end, PSOE and Unidas Podemos have sealed a pact that, in addition to compromising the regulation of rental prices in four months, entails a tax increase. Among other measures, Corporation tax is raised, and personal income tax is raised on incomes over 200,000 euros.
After the confrontation, Pedro Sánchez and Pablo Iglesias wanted to stage peace and unity with a joint appearance in Moncloa, before the Council of Ministers, to reel off the general lines of the Public Accounts for 2021. One of the parties where There have been more disagreements, and the one that has delayed the presentation has been the tax reform. The socialist sector was reluctant to touch the personal income tax. United Podemos did not want to hand over that flag because it had pledged its word.
In the end, personal income tax is raised, but in an almost symbolic way and with makeup. So much so that the estimated collection is just 144 million in 2020 and 356 the next. Specifically, it increases three points the rate for capital income of more than 200,000 euros, and two in the case of income from work greater than 300,000 euros. To put in situation, the Government pact signed by Sánchez and Iglesias contemplated a rise from 130,000 euros.
Likewise, “we raised corporate tax for large groups by limiting exemptions for dividends and capital gains“and a minimum taxation of 15% will be set for publicly traded real estate investment companies (Socimis), according to what is stated by Iglesias, in charge of ‘selling’ this” fiscal justice “and the social part of the Budgets. Finally, also © n after a tug of war, the tax for assets exceeding 10 million euros is raised by 1%.
And as this newspaper advanced, they reduce the tax benefits of pension plans, which was an old desire both from the PSOE and United We Can and whose modification has been endorsed by the Independent Authority for Fiscal Responsibility (AIReF). The body led by Cristina Herrero recommended a total review of the taxation of these products, and the Executive has agreed a cut up to 2,000 euros of the maximum contribution of the plans of individual pensions with the right to deduction in personal income tax, from the current 8,000 euros, while in the case of company plans the maximum contribution rises from 8,000 to 10,000 euros.
To all this, we must add the measures that were already known and that the Executive transferred to Brussels. Among them, the increase in VAT on sugary drinks, the figure on the plastic envases or the so-called environmental taxation that will contribute, according to the Government, more than 1,300 million in 2021.
Social investment and care for the elderly
The act of Sánchez and Iglesias, convened hastily since everything was pending to close the pact between them, has served so that the leader of Podemos achieves the goal he had set for himself of moving the image that it has been the presence of his party that has allowed the “expansive” and social aspect of the accounts. Two facts that Sánchez has also wanted to claim. The project foresees a social public investment of 239,765 million, 10.3% more, including an advance of 27,000 million from European funds.
Iglesias, even, has spoiled the Government the management of the minimum vital income – “This Government does not do everything well and in the minimum vital income there are things that we have not done well” -, wanting to limit the improvements to the social vice presidency and downloading in the Department of Inclusion and Social Security the problems and the collapse lived up to now with this help.
According to the numbers they have anticipated, the State will allocate 600 million to the Agency, that Iglesias has said that it means increasing the government’s contribution by 46%; 700 million of European funds will be dedicated “to improve care for the elderly, moving from the residential model to that of the Nordic countries that are committed to home care”; 200 million for education from 0 to 3 years, 300 million are contemplated to equal the maternity and paternity leave in 16 weeks and that they are non-transferable; and 200 more to support conciliation with professional caregivers for parents with children under 13 years of age “as a first step in building a care system”.
This investment is announced the same day that the State Association of Directors and Managers in Social Services denounces that the communities present a waiting list of 234,000 people already valued as dependents and with another 147,000 people pending assessment; and that in 2019 the state contribution fell even more and stood at 16.1%, with 1,386 million euros -the lowest percentage since the beginning of the law.-
Both Sánchez and Iglesias have wanted to emphasize two very specific issues: 3.064 million more than in the current Budgets will be allocated to Health and there will be 250 million for university scholarships, “the largest historical game“, They have said.
Agreement to regulate the rental price
PSOE and United We Can have agreed to bring the Housing Law to the Council of Ministers within a maximum period of three months, which will limit, and eventually lower, rental prices in stressed market areas.
The rental regulation, along with three amendments to improve the operation of the Minimum Vital Income (IMV), have allowed the closing of an agreement between both formations in the Government for the 2021 Budgets, which are approved this Tuesday in the Council of Ministers.
According to the agreement, the Housing Law, which is currently in public information prior to the proposal of the Ministry of Transport, Mobility and Urban Agenda, will be prepared jointly with the second vice presidency of Social Rights and Agenda 2030.
The law will be brought to the Council of Ministers within a maximum period of three months and will be presented to the Congress of Deputies in a maximum of four months, reports EFE.
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