What does the personal income tax with negative rates proposed by the PSOE me...

emonseo21

A few days ago the PSOE presented its ideas for a tax reform in a Framework Presentation , a document that will be debated at the th Congress of the party to be held in Valencia in the month of October.

Among the proposed topics is the reform of corporate tax to set a minimum effective rate or study new green taxes. But the most notable thing is the creation of negative rates in personal income tax .


What are negative types?
Currently in personal incom  Ghana Email List   e tax all rates are positive. That is, as long as we have income as a natural person we will end up paying some taxes. If the salary is very low and/or the family circumstances are certain, it may be that in the following year's income tax return the total amount payable in personal income tax is zero and therefore the return will be returned .



But the fact that the Treasury returns money to a person does not imply that there are negative rates. It implies that the rate once the declaration is made is lower than the rate that existed in the withholding . But in no case is the type negative.

If the personal income tax rate were negative, this implies that the Treasury would pay the taxpayer. That is, you would be receiving a subsidy and the net salary would be higher than the gross salary , something that currently does not happen.

Negative personal income tax, a good idea
This PSOE proposal is not new. In fact, a few years ago Ciudadanos proposed a salary supplement for the lowest incomes to stimulate the employability of workers with less training.

This salary supplement was even signed in the Budget pact between PP and Ciudadanos, but was never implemented . And it was a good idea that came to nothing, like almost everything from that incomplete legislature.

Therefore, this new salary supplement proposed by the PSOE, although they now call it negative personal income tax, is a good idea. It is a form of direct redistribution, without paperwork, that could reach those most in need without having to wait years to receive the help they need .

The great failure of the necessary Minimum Living Income approved in is the time it takes for the aid to be approved, and an automatic mechanism, where the Treasury verifies the data, necessarily speeds up the aid process .

However, it has a big problem
Expediting the IMV through the Treasury, with zero paperwork and with all recipients receiving it, is a very good idea. But it has a problem: since the payer of the income cannot apply negative rates to the withholding, the worker would have to file the income tax return to receive the income through the Treasury. And this implies that he would receive the aid a year later .

Supporters of the four-day work week come to blows: how much truth is there in the data from the studies that defend it
ON THE SALMON BLOG
Supporters of the four-day work week come to blows: how much truth is there in the data from the studies that defend it
On many occasions, a year of delay can be very important, just look at the desperate situation of many families because the IMV is not processed and was approved a year ago.

To compensate for this, a mechanism could be created to advance income tax refunds, as exists for example with the maternity or large family allowance. But it would have to be the beneficiaries who request it and although the process could be very simple (as it is in the cases mentioned) there is numerous literature that explains that when aid is not automatic there are people who are left out .