Geoscience Reference
In-Depth Information
TABLE 7.5
(continued)
Main Changes to Income Tax in
Connection with Regional Financing
Period
Political Context
2004-2009
Minority Socialist Government
Coalition government in Catalonia
between Catalan Socialists and
left-wing nationalist parties
Support needed by Catalan
nationalist parties (on the left
(ERC) and occasionally on the
right (CiU)) and other minority
forces in parliament.
2008- General Election in 2008.
Again, Socialist Minority
Government in need of support
by different groups to pass
legislation.
The new Constitution of Catalonia
(June 2006)
:
- The share of the income tax
claimed by Catalonia increases to
50%.
- The share of the VAT and Special
Taxes raises up to 58%.
- Establishes a legal limit to the
effects on Catalonia of the
equalization system: Catalonia
shall not lose its relative position
in terms of GDP per capita
because of redistribution towards
other regions (see
Table 7.6
).
- It sets a minimum level of
investment by the national
government in Catalonia
proportional to Catalonia's GDP
share within Spain.
December 2009 Reform
:
Essentially, a generalization of the
system built in the June 2006
Constitution of Catalonia:
a) ACs' share of VAT limited to
50%
b) ACs' share of Special taxes to
58%
c) ACs' share of income tax kept
at 50%
The equalization of financial
capacity between regions for the
purposes of public service
provision is limited to three policy
fields: health, education, and
social services. Everything else is
excluded from the calculation of
regions' expenditure needs.
* See Cabr e-Dur an (
2007
: 113) for details.
Sources:
Bosch and Dur an (
2005
); Dur an (
2007
); Le on-Alfonso (
2007
); and Maldonado and
Gomez-Sala (
2003
).
