TAX CHANGES TO MAKE WORKERS OVER 3 EURO BETTER OFF

The week may have seen one of the most future-positive announcements of the national government in recent times, with tax incentives and initiatives to encourage employment, but how the proposals will actually matter is one that seems somewhat diminished in the real world.

The announcement of a reduced contribution to social security for permanent contracts is one of the biggest drives to encourage employment ever made by the government, as testified by the president, Mariano Rajoy, but the reality is that a company will still have to be able to afford to employ those workers, pay their salaries and stump up the contribution, the reality being a saving of nearly a couple of hundred euro per month, but at the expense of the cost of those new jobs, bearing in mind the minimum wage in Spain stands at 752.85 euro per month, 9,034.20 per year, or 27,102.60 in total for the three year qualifying period of the scheme, a scheme. Given the calculations Rajoy himself made, based on the minimum wage, a company would save less than 600 euro in contributions for their 9,000 euro per annum commitment.

Similarly, the raising of the threshold for income tax was said to benefit 12 million workers once implemented in the election year of 2015, a proposal which was also to be tabled by the PSOE, but it was the threshold which was changed, increased from 11,121.20 euro to 12,000 euro. Across the Valencia region, the finance ministry state that some 44,822 workers would benefit from the adjustment, at the 1.9 million euro cost to the public purse, but the reality in the pockets of those workers who now qualify is a tax saving of just 42 euro, or 3.50 euro per month.

Of course any tax saving is of benefit to the workers who are struggling and is a positive move in the sense that before the last elections the Partido Popular vowed that they would not increase tax, only to make that their first priority once given the power of office, but the reality of how the changes will improve the quality of life for the millions unemployed and those who have found themselves homeless, starving and, in some cases, unable to face the future at all, remains to be a question that can only be answered once the changes are implemented and accepted. Similarly, the reasons given for increasing tax in the first place was to plug the void of debt, so careful consideration on how this move will put a burden on the finances of the country will no doubt be closely monitored by those with the power to choose.

Filed under: http://www.theleader.info/article/42820/

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