In several weeks the Prime Minister will recount his first year in office during his state of the nation address. So the Council of Ministers will speed the legislative process along during the next few weeks. As EU Economic Commissioner Olli Rehn visited Spain yesterday, the nation's Minister of Finance and the Minister of Labor were pressured to share the contents of this future business law.
The announcement was misleading because it did not respond to the reforms that Spain needs. In regard to taxes, it compensates self-employed service providers for debts that the government owes them. These debts have increased mortgage defaults among the small- and medium-sized businesses. To incentivize employment among young workers, a flat tax will be established for businesses that hire people under 25 years old (50 euros compared to 254 during the first six months) that means a measly 1,224-euro incentive.
It deals with a group of measures that, in addition to instilling confidence and creating a solid base of independent businesses, distorts efficient market operation and could enable certain kinds of fraud and increase the Social Security deficit. Tax awards and rates that factor in actual income is what the self-employed need.
That said, after choosing to increase taxes, Critóbal Montoro is not adding much content to this entrepreneur law and has left then by the wayside in the state of the nation debate.
