For economics Nobel Laureate James Buchanan, low taxes and spending control are essential components of economic prosperity and individual freedom. The two were big electoral barns when Carlos Mazzon opened the doors of the Palau de la Generalitat last May. Cutting taxes is emerging as their secret weapon to stimulate the stagnant Valencian economy and put it on the path to prosperity. Inheritance and gift tax for first and second degree relatives practically disappeared.
On 20 December, with no apparent disagreements among partners, Consel undertook a reasonably rigorous public accounting as a result of a cautious budget policy. Without lamenting too much about spilled milk and healing some of the wounds of the election cycle. The improvement in outlook given by risk rating agency Standard & Poor's gives them a certain extra degree of stability in the face of high interest rates consolidating financial markets, which emphasize prudence from a credit, cost perspective. Of this, 1,341 million euros will grow.
On December 20, Conseil took a hard reckoning as a result of a cautious policy.
Although it is beyond the scope of these lines, I cannot resist giving two strokes on the expenditure side. Despite the commitment to control, basic social services have 18,186 million, an increase of 2.15% compared to 2023. AIREF is a better alternative to independent institutions like CEV or BBVA Research in the face of cooling economic growth and employment. in the ranges of 1.5%–1.9% and 0.8–1.7, respectively. The specific moderation of the investment of 17.7% does not concern the structure of the multi-year budget programming and fulfills the optimistic forecast for its total performance indicated by the Ministry of Finance. In the short term, maintaining an investment tone in our economy calls us to be imaginative and create positive expectations for takeovers by private enterprise. For example, through encouraging policies that build trust in institutions (quality of government, legal protection, governance structures…).
The prickly political and economic situation did not help to overcome the bottlenecks suffered by Valencian public revenues as a result of the unfair regional funding system. Achieving consensus on its reform seems impossible given the weak national leadership and the debate presented in the form of a zero-sum game, with advances in some coming at the expense of others. In campuses that do not increase disparities between territories, partial debt forgiveness or some form of compensatory mechanism may be a temporary relief to a citizen for that 8.5%, in which FEDEA estimates that Valencia's funding is low. However, the challenging objective of closing with a deficit of 0.3%, the need to recover 900 million to provide health services to displaced people and a 54% decrease in European funds confirm the limits to the greater use of Mazón's financial puzzle.
A more favorable tax path has begun to follow. As the income of 20,000 Valencians decreased to 191 million, the measure taken in inheritances and donations followed six income deductions with an interesting preventive approach in the most innovative (e.g. sports training) and effects estimated at more than 180 million. Citizenship. With an impact of 19 million euros, the by-law reduces the tax on property transfer tax to 6% for under 35s and 3% for sensitive groups when purchasing custom homes worth up to 180,000 euros. Both bet on the approach to social reality and the humanization of taxation rather than the dynamism of the real economy.
All in all, these first steps demonstrate the solidity of the President's personal commitment, fully relying on the social demand to advance in the “Tax Revolution” as a solution to the discontinuities and gaps affecting the Valencian economy (competitiveness, productivity, employment or). salary among others). Faced with criticism from progressive circles, the spending structure based on provisions for basic social services apparently dissipates any erosion. Meanwhile, the short-termism that prevails in other forums isolates the strength of commitment to the project or the excesses of realpolitik.
There is a long way to go to achieve the additional 77% tax savings promised to Valencians in the electoral plan. Some key parts of the Valencian tax system remain unchanged, such as the regional level of personal income tax or the wealth tax. These are what will allow us to achieve our intended goal. A significant change in the situation is needed, not a sudden turn, but a turning point in a wider process. In Churchill's words, this is not the end, not even the beginning of the end, but the end of the beginning.
