Myths and fallacies about taxes and our tax system - That capital pays for work

A true fiscal reform has to suppress the favorable treatment to the rents of the capital that pay little for their accumulation of capital, financial movements and benefits. Or they do not pay. 

Why should income from capital be less taxed than labor income?

For capital to pay, a real tax reform must establish a Tax on Financial Transactions (ITF), heir of the Tobin Tax, proposed by the economist James Tobin in 1971 to discourage short-term speculation of certain financial assets.

Unfortunately, an ITF project for ten states of the European Union, which should be in force now, seems to have gone to hell after several years of goring the partridge in useless meetings of the Ecofin (ministers of economy and EU Treasury).

If confirmed bad fiscal news will have to start in Spain a sine die campaign for this country, as they already have Italy and France, establish a state ITF that, in addition to dissuading part of the speculation, collect a few billion euros to alleviate budget insufficiency.

Finally a real tax reform has to restore without tricks or tricks the taxes on Successions, Donations and Patrimony, disappeared in fact in some autonomous communities by graceful bonuses and exemptions granted by autonomous governments. 

Like the PP of the Community of Madrid, where they stop collecting almost 400 million euros annually for the de facto suppression of the Wealth Tax.

Another taxation is possible and necessary, but it requires a firm political will to give the tax system more progressive, give more weight to direct taxes versus indirect taxes and that capital pays taxes for its profitability as work pays for its income.

Finally, a real tax reform must include the reduction or elimination of incentives and deductions of corporation tax. And, of course, must assume the fiscal pressure that the countries of the eurozone. According to the latest Eurostat data on fiscal pressure in the EU, Spain has 34.6%, compared to 41.4% of the countries in the euro zone (of which we are part). 

In other words, if in Spain the fiscal pressure were that of the eurozone, it would raise 60,000 million euros more per year.

And, of course, a real tax reform would include more personnel and more means for the Tax Agency to end tax fraud, especially the big ones who do not even bother, do not get upset. 

But, above all, the principle of fiscal sufficiency must prevail: not spend according to the approved PGE but elaborate according to the needs and rights of citizens.

Fair, progressive and sufficient taxation is the best way to end inequality and fulfill the objectives and purposes of the citizens' welfare Constitution. 

But in the Kingdom of Spain it is very difficult because a reign of fiscal injustice and corruption has settled among us. 

Something will have to be done about it.