The Popular Party has turned the promise of tax cuts into a political mantra. They repeat it in budgets and campaigns, as if merely announcing a tax reduction would solve the problems of healthcare, education, housing, dependency, reconstruction after the DANA, or fire prevention. But the underlying issue is different. Who truly benefits from these cuts and what do we stop funding when the Generalitat gives up public revenue.
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The fiscal policy of the PP and Vox has two faces. One presents itself as a cut for millions of taxpayers, but barely changes the lives of the majority. The other produces real savings for those with high net worth. In the first case, there is propaganda. In the second, clear economic benefit.
The best way to understand the trap is to start with the IRPF. It is the easiest measure to sell because it nominally affects 2.7 million taxpayers. The Consell announces 160 million euros in savings and presents it as a great cut for the citizens. But when you look at the details, the real effect is very different.
A person with a taxable base of 18,000 euros would save about 42 euros per year. Around 22,000 euros, the savings would barely exceed 50 euros annually. At an income of 72,000 euros, the accumulated savings would be just over 300 euros per year. And from 100,000 euros, the savings would be around 430 euros annually.
The conclusion is clear. For low and middle incomes, the cut will be so small that no one will notice it. For upper-middle incomes, it also does not change life. Someone earning 72,000 or 100,000 euros a year will not see their situation transformed by 25 or 35 euros a month.
That is why this IRPF cut is not real help for families. It is a political investment by the PP in advertising. The Generalitat gives up public revenue so that the Consell can repeat that it lowers taxes for everyone. What each person receives is laughable. What the common budget loses is enormous.
And here appears the second face of the fiscal policy of the PP and Vox. When they really want to favor someone, they know how to do it. We have seen it with Inheritance and Donations and with Wealth Tax. Here we are not talking about a few euros a month. We are talking about thousands of euros, tens of thousands, and in some cases, much more.
It is reasonable that an inheritance or a donation between direct family members pays less when we talk about a home, some savings, or the fruit of a lifetime of work. But protecting ordinary inheritances cannot serve as an excuse for fortunes of millions of euros to pass practically intact from one generation to another without contributing much to the support of society.
A 99 percent exemption on Inheritance and Donations does not affect equally those who receive a modest inheritance and those who receive a very high fortune. Formally it is presented as a measure for all families. Materially, those who benefit the most are those who transfer or receive the most wealth. According to recent estimates, this decision means around 212 million euros less revenue for the Generalitat. And the Valencian Government itself already boasts of an alleged tax saving in Inheritance and Donations that exceeds 630 million in this legislature.
The word saving sounds very good, but it is worth saying it completely. What some people save is also what the Generalitat stops collecting to support public services.
With Wealth Tax the orientation is even clearer. First, they raised the exempt minimum from 500,000 euros to 1 million, with an impact close to 62 million for public coffers. Now, by a Vox amendment agreed with the PP, they raise it to 2 million. The consequence is very concrete. Eight out of ten Wealth Tax filers will stop paying this tax and the Generalitat will lose another 28 million euros.
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This is not a measure for the middle classes. It is a political decision so that a minority with very high fortunes contributes even less. Also, those who continue paying will also benefit from a reduction in the taxable base, because they will be able to deduct those two million exempted.
These fortunes have not been built in a vacuum. They have grown thanks to infrastructure, legal security, public services, trained workers, and an organized community that has also made them possible. Asking for a reasonable contribution from those who accumulate the most wealth is sustaining a society where opportunities do not depend only on the surname with which one is born.
To the 160 million of the new IRPF cut are added 90 million less from the reduction of Property Transfers, the estimated 212 million from the exemption on Inheritance and Donations, the previous 180 million IRPF cut, and the growing impact of Wealth Tax. AIReF has estimated around 495 million in revenue loss associated with tax reforms in recent years.
With that money, healthcare professionals can be hired, educational centers reinforced, waiting lists reduced, primary care improved, public housing financed, dependency attended to, municipalities supported, or investment made in prevention, emergencies, and reconstruction.
There lies the key to all their fiscal policy. To the majority, they offer a small cut, useful for the taxpayer, but useless to improve their daily life. To those with large fortunes, they truly reduce taxes.
Moreover, there is a contradiction that the PP never explains. They lower taxes in the Valencian Community while demanding more money from the State. They ask for resources to finance public services but reduce their own revenue. They demand solidarity from all of Spain while favoring those who least need help.
Lowering taxes is not free. The honest question is not whether we want to pay more or less. The honest question is what kind of society we want to build, who should contribute more, and what we stop doing when we reduce public revenue.
When a tax cut is not noticed in the pockets of the majority, but does weaken the capacity to finance healthcare, education, dependency, housing, emergencies, or fire prevention, it ceases to be help and becomes propaganda.
It is a taxation that clearly benefits a minority with large fortunes and harms the Valencian social majority. Eight out of ten Wealth Tax filers will stop paying due to the decision agreed between PP and Vox. To 2.7 million taxpayers, they offer a ridiculous IRPF cut while weakening the public services that support their daily lives.
Miguel Soler is Secretary of Education of the PSPV-PSOE Executive