Luis Alcaide | In the wake of his meeting with Prime Minister Pedro Sánchez, the main opposition candidate Alberto Nuñez Feijóo, recently elected president of the Partido Popular, complained that he had not been heard on his proposals on taxation: a reduction in personal income tax for taxpayers with lower incomes in order to compensate for the greater frequency of the effects of inflation. This is neither a pro-vo¬lu¬tionary nor a pro-revo¬lu¬tionary proposition. It is simply a formula that would improve the disposable income of low-income citizens.
An alternative to other distribution formulas based on improvements or subsidies for the most disadvantaged. PP tax experts and officials from the ministries of economy and finance would do well to discuss Mr Feijoo’s proposal. Vice-president Calviño, who has heard the message, can only get down to work to gauge its redistributive nature and, of course, its impact on tax revenue in an economy with a high budget deficit and high public debt.
The concern expressed by candidate Feijóo is not to safeguard the interests of the richest but to correct inequalities. Inflation does not tend to favour the low-income population, while it does favour higher-income citizens.
Núñez Feijoo’s proposal to compensate for the broadening of the tax base generated by inflation is not in contradiction with the distributive policy of the current Sánchez government. The dilemma of more aid for the less well-off via a tax cut versus increased public benefits is an interesting opportunity for Feijoo’s economists and the ministries of economy and finance to discuss.
Politically, a sign of understanding between the two main parties would be well received by a citizenry living through difficult economic times. Troubled times that demand cordiality between the two main parties of a democracy threatened, as Moisés Naim warns, by populism, polarisation and post-truths, as well as by inflation.
