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Liberalisation and low taxes make Madrid into the most prosperous region

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MadridUpdated:14/08/2019 02:12pm

After 24 years in the hands of governments of the PP, Madrid is, without doubt, the Spanish region that has applied the policy to a more liberal and less interventionist of all the national geography. And the locals are, in addition, Spanish citizens pay less taxes. The combination of these economic policies that the new regional executive is committed not only to maintain but to deepen it, have put Madrid tothe head of economic growth and national wealth.

GDP: Grows a 1.1 points more than the average

The economy madrid is placed year after year in top positions of the rankings of regional growth. In 2018 grew by 3.7%, 1.1 points above the average growth of Spain. This greater growth is translated, also, in more wealth per capita. Last year the GDP per inhabitant of Madrid amounted to 34.916 euros, elmayor of all communities and almost 10,000 more than the Spanish average.

Labour market: it gives employment to three million people

The unemployment rate in Madrid is slightly above 10.5%, casi four points below the average, although the best numbers have the Basque Country and Navarre, with rates below two digits. It is the third region that generates employment: it has almost 3.1 million of employed persons, by Catalonia and Andalusia. These two regions, however, have unemployment rates higher than in madrid.

Trade: total freedom of schedules

With the approval in 2012 of the Law of dynamization of the business activity, the entrepreneurs in madrid are free to open their establishments on all days of the week in the schedule that they wish. It is the only community in Spain that allows total freedom of trading hours. In addition, unlike other regional governments, has been eliminated bureaucracy to open new businesses and do not require licenses to the opening of large surfaces, as does, for example, Catalonia.

Personal income TAX: maximum Rates and higher lows

The various governments of the PP have taken advantage of the transfer of powers over some taxes, such as income TAX, to reduce rates and introduce new deductions. This e-model maximum rate of personal income TAX that is paid in Madrid was 43.5%, compared to the state average of 45%. But the difference is much greater if we compare what happens in communities such as the valencian or Catalan, where not only do you not have reduced the types state, but which have been raised.

So, for example, in Catalonia and in Valencia the maximum rates of income TAX come down to 48%, 4.5 points above Madrid. But not only have lowered the rates to high incomes, and also the low rates of the tax are lower in Madrid than in other communities. The minimum rate in Madrid is at 18.5%, when in Catalonia is 21.5%, three points more. According to calculations of the REAF, a taxpayer with an income of € 30,000 would pay per year for about 300 euros more in Catalonia than in Madrid. With the new tax rebate promised by Díaz Ayuso differences can become enlarged.

Other taxes: no Heritage or Inheritance

Unlike what happens in other autonomous communities of spain, in Madrid will not pay Tax on Heritage, and there is an exemption in the Inheritance Tax of 99% on inheritances from parents to children. The proposals of the Socialist Party in Madrid went through to recover the estate Tax and reduce the bonuses on the tribute levied on the inheritances. The PSOE and United we Can also have raised a set minimum in all of the autonomous regions at state level, which could occur if, finally, Pedro Sánchez was sworn in as president of the Government with the support of the populists.

Investments: The region more attractive

The low taxation and the ease of opening new businesses have become the Community of Madrid in the most attractive of Spain, to attract investments. For years, Madrid and Catalonia fought for the leadership of this ranking, but after the outbreak of the “procés” Madrid occupies month after month the first position.

Translated from ABC News https://www.abc.es/espana/abci-liberalizaciones-y-bajos-impuestos-convierten-madrid-region-mas-prospera-201908140212_noticia.html

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