2023 begins with a new personal income tax year , and as always, some changes...

emonseo21

begins with a new personal income tax year , and as always, some changes come. At the state level there are some interesting developments, such as the increase in the tax-exempt minimum and the extension of the reduction for work income (which favors the lowest incomes).

However, one thing that is increasingly pronounced is the difference between state regulations and those of the Autonomous Communities . There were already differences in the past but increasingly they are making use of their powers of fiscal autonomy.


The example of Madrid
Although almost all the Communities have touched something on Personal Income Tax, such as the minimum and maximum rates, the case of Madrid is especially significant. With the deflation of personal income tax and personal   Cyprus Email List  and family minimums, Madrid's personal income tax looks less and less like the State's .



How inflation triggers tax collection and Spain's fiscal 'false miracle'
ON THE SALMON BLOG
How inflation triggers tax collection and Spain's fiscal 'false miracle'
That is to say, Madrid has completely different sections from those of the State. Their minimums are also higher. The applicable rates are lower. In short, it seems like a different personal income tax .

This makes calculating the tax more complicated but no one really does it by hand, it doesn't matter. But the truth is that the idea at the time that personal income tax would be divided % between the State and the Autonomous Communities , giving the latter the autonomy to define their share, has culminated.

At the beginning of this reform, the Communities simply copied what the State said. Thus, if the maximum rate was %, it was actually % for the State and % for the Autonomous Community. But the years go by and the Communities have been introducing changes in parallel to those of the State .

If you look at the income tax return you can see that the taxes paid to the State and the Autonomous Community can be very different. Now, is this good or bad?

Advantages and cons of different taxes
That the Communities have fiscal autonomy is good on the one hand. They are very prone to complaining that they don't have money and blaming the State, but if they have the ability to raise or lower their taxes, things change .

Economic benefits of the new family law
ON THE SALMON BLOG
Economic benefits of the new family law
The fiscal autonomy they have is not perfect, since they do not collect themselves, and when the liquidation arrives there may be surprises, as happened with the - crisis. But having autonomy allows them to plan the income they need and not spend all day pointing their finger at someone else.

In the system that we have set up, the Autonomous Communities are responsible for an important part of the expenditure (Health, Education), so it makes sense that they also have responsibility for collection .

It could be argued that it would make more sense for the income tax return to be completely separated, like in the US where you have to do a federal one and a state one, but that would complicate things: in the current tax return, although very few look at it, it is quite separated. explicitly what is paid on both sides. If the settlement time were improved it would be a great advance without affecting citizens in general .