The law registered by the PP to lower the income tax brackets due to the rise in inflation will not even be debated in Congress. As ABC has learned, the Government has vetoed the proposal on the grounds that its approval would reduce budget revenue. An argument full of controversy since tax experts have warned that not deflating personal income tax will imply that the Treasury secretly makes cash and enters between 3,000 and 4,000 million “extra”. During the first quarter, the State entered 20 percent more while growth was only 0.3 percent.
The popular law proposed to adjust the Income Tax so that workers who see their salary rise due to inflation do not go up in the tax bracket and end up paying more taxes in a hidden way.
The salaries agreed in collective agreements have risen 2 percent, as have the payrolls of civil servants and pensions, so not applying this adjustment, experts have warned, will produce a loss of purchasing power in all its recipients. “It is essential to adjust the personal income tax so that families do not pay the price increase twice: once in the shopping basket and another when they make the income statement,” argued the popular text. If the Government were to deflate personal income tax, families would notice it automatically since the monthly withholdings applied to payroll would be reduced.
Alberto Nuñez Feijóo’s party stressed that personal income tax was “adjusted for the last time” in 2014 through the tax reduction approved by Mariano Rajoy and that since then “inflation has risen 12.8%”. His proposal contemplated adjustments in the amounts with the right to reduction, in the personal and family minimums, in the sections of the scales both general and savings, and in the amount of the deductions applicable in the differential quota. He also advocated adjusting the minimum limits for filing the return and updating the bases for calculating withholdings. The controversy is also served, because this same Monday, the president of the Community of Madrid, Isabel Díaz Ayuso, announced that she will deflate the regional Income Tax rate for 2023.
It is not the first time that the Socialists have knocked down an initiative that seeks to deflate personal income tax, but it is the first time that the Government has done so using the veto instrument against a bill. So far, Congress has rejected this idea twice, downing non-law propositions (non-binding initiatives) presented by the PP and Ciudadanos. In this operation, the Socialists have always had the support of United We Can and other partners of the investiture bloc. Núñez Feijóo has already asked the head of the Government, Pedro Sánchez, to include the adjustment of personal income tax within the package of measures approved to mitigate the economic effects of the Russian invasion of Ukraine. But the socialist rejected the measure.
The Constitution reserves for the Government the power to express its disagreement with any measure of the opposition that implies an increase in spending or a decrease in income to protect the execution of the Budgets in force. By doing so, the proposal is automatically vetoed.
