The Peoples' Party is up in arms. Tax reforms are widely unpopular, especially among businesses. They criticize how Montoro is lowering taxes and proposing a tax redistribution that will weigh heavily on PP voters, which have already shown their disapproval by abstaining in recent European elections.
Because regional and national elections are just around the corner, the PP can't afford to enact an unpopular measure such as taxing severance packages in excess of 20,000 euros. Some PP businessmen who are in this position are asking to double the amount of money that is tax exempt or not tax the severance packages directly. They seem to forget that this measure is being applied across Europe with the exception of France.
Montoro is under a lot of pressure from the PP. Still, it won't be easy for him to change his plan now. This measure attempts to avoid cushy agreements with companies and workers, a practice that is unfortunately common and a tax on the labor market. Taxing severance packages is an indirect way to make layoffs cheaper for companies. It could also boost the Social Security system's coffers. Reforms should never respond to party interests, but to national need. At this point, the government should resist pressure from the PP and stick to its reforms.
