On Saturday, September 17, Spain published its Official State Gazette (Boletín Oficial del Estado in Spanish), which outlined details of a measure designed to create a new Patrimonio tax for 2011 and 2012. It can be modified by each of the regional governments, who will be able to make legislative decisions around adapting the tax. So the measure could remain a mere instruction manual and not an effectual revenue enhancement.
The spokesperson for the group Inspectores de Hacienda del Estado (IHE), Francisco de la Torre, has dropped the prediction of how much the tax can potentially earn from 1 billion euros to 500 million euros, considering that the Madrid government is exempting 100% of the tax rate for all its citizens.
Tax revenues exceeded just over 400 million euros before the Patrimonio was sidelined. According to the Memoria de la Agencia Tributaria, in 2007, Madrid?s tax revenues totaled 412 million euros.
Remaining regional government should determine whether they will support their own exemptions, modify tax laws or maintain everything as is. Further, Basque and Navarra ought to approve the tax in their respective "forales" (ancient laws still observed in some Spanish regions), and Catalonia has already announced their intent to waive the tax.
De la Torre denied that reinstating the Patrimonio corresponds with a recent decision to increase taxes on the wealthiest people in Spain, because it only excludes a part of the middle class. "We have two bands in Madrid, and they aren not for the super rich," he pointed out. Since the reinstatement of the Impuesto in 1978, all regional governments have been receiving Impuesto transfers that make it impossible to impose minimums, deductions and subsidies on the tax.
In 2002 Madrid was the last regional government to receive "ceded transfers" (tax revenues that flow from federal to state entities). Again, its government decided to allow for a 100% exemption for the Patrimonio, which means that despite what Zapatero has levied for a general exemption, Madrid will neither levy nor collect on the tax unless Esperanza Aguire and her government decide to change the law before year end.
