The Governing Council of the Community of Madrid has approved this Wednesday the deflation of the rate and the minimum income tax-exempt by 4.1% for all income brackets, which will apply to the 2022 financial year. The plan will help taxpayers combat the effects of inflation, it will reduce collection by some 200 million and will especially benefit the highest incomes.

The reform, which will see the light if it has the support of Vox in the Assembly, bears the stamp of the most liberal PP: in other regions governed by Alberto Núñez Feijóo's party, only the three sections below 35,000 euros will be deflated (case of Andalusia and Galicia), or the four that there are up to 60,000 (Murcia), so that those who earn the most will not necessarily be those who benefit the most in absolute terms, as will happen in Madrid.

"The measure is very important," defended the government spokesman, Enrique Ossorio, at the press conference after the Governing Council.

"No one is more fond of lowering taxes than we are, in the Community of Madrid we have been lowering taxes for 19 years," he continued, omitting that in 2019 none were lowered due to the clash between PP, Cs and Vox.

“We all know that an inflation is taking place that we have not known about in Spain for many years, and in the face of that, what Madrid is doing is what the Government of the nation has not wanted to do, deflate all the sections of the rate”, has added, recalling that the measure will affect the people of Madrid who rise from the tax bracket in personal income tax as a result of an increase in salary.

And he has finished: “It is progressive.

The more income you have, the benefit is less”.

However, that statement only holds in percentage terms, not in absolute terms.

Thus, the reform supposes a reduction of the quota of 6.26% for an annual gross salary of 20,000 euros;

2.71% for a salary of 32,600;

and 1.49% for a salary of 90,000.

At the same time, this means that a taxpayer under 65 years of age with two children (one of them under three years of age), and gross income of 20,000 euros, saves 44.34 euros, while one with the same characteristics, and with gross income of 90,000 euros, you will save 189.72.

A difference of 145 euros in favor of the high-income taxpayer (who is also the one who pays the most in absolute terms) that is maintained with any other example.

Thus, a single person without children under 65 years of age who earns 20,000 euros gross per year will have a tax saving of 30.57 euros with deflation,

It is not the first time that the Government of Díaz Ayuso has opted for this route.

In June 2021, the regional Executive approved a half-point reduction in all income tax brackets valued at 330 million and that especially benefits those who earn the most, by applying a half-point cut to all brackets.

The reason is that, as occurs with deflation, high incomes benefit from the reduction in all sections of the tax scale.

And the union of the two reforms multiplies, where appropriate, the advantages.

Thus, a taxpayer under 65 years of age with two children (one of them under three years of age), and gross income of 20,000 euros, will obtain a total saving of 10.81% (80.49 euros), while one of the same characteristics, and with gross income of 90,000 euros, you will save 4.39% (577.54 euros).

A difference of 400 euros in favor of whoever charges the most.

opposition complaints

That balance has aroused indignation in the leftist opposition of the regional Assembly.

For its part, Vox not only supports the measure, but also calls on the PP to go further in the reduction.

"These fiscal measures are a poisoned gift," complained Mónica García, leader of the opposition as spokesperson for Más Madrid.

“It is a trickery maneuver: when you open the bucket of those who have the most, they save 600 euros, and when you open the bucket of those who have the least, they save six, and you find that they are going to have to pay a private insurance for public services that are no longer paid with deflation”, he continued.

"More than a deflation, it is a deflagration of public services."

"Once again the PP with the same trap, what it does is a discount of between 0 to 10 euros to the vast majority of families in Madrid, while thousands of euros are reduced to a few large estates", he lamented for his part Juan Lobato, the leader of the PSOE.

"From the PSOE of Madrid what is proposed is to lower taxes on the middle classes of Madrid."

"Anything that is to continue in this drift that goes through fiscal injustice and to increase social inequality is contrary to the interests of the people of Madrid", Alejandra Jacinto, from Podemos, finished off.

“High incomes in the Community of Madrid have been deflated for too long to continue doing so”.

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