To make decisions about fiscal policy when political pressures are heavy is always risky. The Convergence and Union (CiU) party is experiencing this dilemma in its negotiations with the Republican Left of Catalonia (ERC). Taxes on sweetened beverages and saturated fats were on the list of new taxes that Oriol Junqueras proposed to Catalonian leader Artur Mas.
The tax on sweetened beverages was approved, which will hurt multinational and local companies. Luckily, pressures from the Catalonian food industry thwarted the second proposal to increase taxes on foods high in saturated fats. With the changes, Mas has created a tax policy counter to the one that he championed in his election campaign. This kind of tax measure has failed already in Denmark, and it is likely to have little effect in Spain.
