The Partido Popular (PP) plans to reduce the Impuesto de Sociedades by changing the structure of who receives what rate reductions. Currently, companies who bill more than 10 million euros per year receive a 25% tax break, but that cutoff will be raised to 12 million. Companies that invoice more than 5 million will pay 20% in taxes.
The measure will stimulate the economy. But perhaps the PP should push the tax reduction not based on business figures, but through premiums for those who create employment and generate investment. Further, it should take do its best to simplify the tangled web of deductions and discounts that complicate this tax.
Thus, the PP would forego less potential tax revenue. Because it is certain that this laudable measure will complicate the already-challenging goal to reduce the deficit. In addition, the VAT and similar taxes could also be raised, because there are greater margins there.
