Prime minister Mariano Rajoy is likely as serious about cutting taxes now as he was in December 2011.
Recall that at the start of the 2012 I noted Promises Go Out the Window as Spain Undertakes Huge Tax Increase Coupled With Biggest Budget Cut in History.
Via translation from El Economista, the director of the Foundation of Savings Banks (Func), Ángel Laborde says Government is “Not Serious” Regarding a Proposed Tax Cut.
Angel Laborde explained in the newspaper El Pais that “government revenues funded only 85% of the costs, excluding financial aid. The remaining 67,755,000, was the deficit had to be financed by increasing debt. This stood at the end of year to 960,640 million, 93.9% of GDP. recall that in 2007 the debt was 36.2% of GDP.”
“Despite the widespread belief in our society that public spending is silhouetted sharply, the fact is that in 2013 slightly increased by 0.2% over the previous year. This, coupled with the decline in GDP, made weight representing the same GDP increased from 44% to 44.4%, “says Angel Laborde.
Tax revenues continue to grow by increasing taxes and not by the growth of economic activity, so any tax cut would lead to a reduction in spending or an increase in public deficit.
Anti-austerity promises are being made in Spain and France that have virtually no chance of happening. Of course, that is always the expected promise everywhere.
Mike “Mish” Shedlock