The collection of the new tax on large fortunes does not change the ranking of wealth tax revenue by community in Spain, which continues to be led by Catalonia. In 2022, the collection of the wealth tax was 690 million (722 if the rights generated are taken into account) in the community, to which the two million tax on large fortunes should be added. On the other hand, Madrid taxpayers have contributed 555 million to the public treasury for the aforementioned tribute to the great fortunes, so the collection in Catalonia remains 25% above that of Madrid.
These data demonstrate that it would not have been possible to standardize the taxation of high incomes by communities that the Minister of Finance, María Jesús Montero, had defended during the previous legislature when she promoted, for example, the white paper on taxation.
The design of the new state tax explains why – despite there being more fortunes in Madrid than in Catalonia, according to data from the Tax Agency – it is in the Catalan community where more is collected for wealth. The main reason is because in Catalonia you start paying taxes from half a million, while the tax for large fortunes starts from three million. The second is an error in the wording of the state tax, which allows the unpaid estate fee to be counted to reduce the payment. Current legislation provides that what a taxpayer pays annually for assets and personal income tax cannot exceed 60% of their taxable income base. With the wording of the law – which was attempted to be modified – it is possible to account for what should be paid in Madrid for assets even though nothing has actually been paid. Tax sources consulted maintain that it is very difficult to calculate the tax loss due to the aforementioned error.
The Spanish rule obliges all taxpayers with assets of more than two million to file the wealth tax declaration even though in their community it is 100% subsidized, as is the case in Madrid or Andalusia. For this reason, it is public that – with data from 2021 – in the Madrid community there were almost 19,000 citizens who should have paid in aggregate more than 1,200 million in wealth tax. Being 100% discounted they didn’t pay anything. With the new tax, only a little more than 10,000 people in Madrid paid the tribute to the great fortunes, with the aforementioned global collection of 555 million.
It is something similar to what happens in other communities like Andalusia. In 2021, when the wealth tax was in force in the Andalusian community, 108 million were collected and now with the new state tax only 29.7 million.
In the case of Catalonia, the Department of Economy, headed by Natàlia Mas, designed a strategy to capture the maximum of the extra revenue from the new tax. The calculations were that what Catalan taxpayers should pay for the wealth tax was 12.1 million. It affected about 290. The Government approved an increase in Patrimony to capture that money. Once the modification was made, the forecasts were that 289 Catalans would pay 1.7 million. In the end – according to data from the Spanish Treasury – 322 people paid the tribute for a total amount of two million, which made the forecasts very close to reality.
