Núñez Feijóo arrives with the bag of populist gifts

The electoral campaigns are approaching in this 2023 and you have to have the list of gifts ready. Not all of them will be viable, some will never come true and finally there will be those that can be placed in the category of the most uninhibited populism. The one who says that in the face of a complex economic situation, not only do you not have to make sacrifices, but the time has come to make cash and receive a little money courtesy of the State. Not because we need it. Because we deserve it.

The Popular Party has presented this week a bill in Congress in order to recover the personal income tax deduction for the acquisition of habitual residence. Alberto Núñez Feijóo had already made the proposal in November and now has been the moment chosen to register it in Parliament.

At the time, he said that it had been the Government of Pedro Sánchez that had suppressed it. It was fake. Initially eliminated by Zapatero, it was later recovered by Rajoy at the end of 2011 to be abandoned again in 2013 when Brussels asked if the Government was leading a crazy life taking into account the very delicate financial situation of the State accounts.

The deduction continues to exist for buyers of apartments prior to 2013. It works as a kind of extra payment when making the income statement. The maximum that you can deduct is 1,356 euros and it is not uncommon for most taxpayers in that position to deduct close to a thousand euros.

It must be explained in these terms: it is a gift given to you by taxpayers without the right to this deduction, including those who do not have money to buy a flat. Like a few of the aids granted by the State in Spain, it is a contribution that goes from bottom to top. Anyone would say that it should be the other way around, but it is one of the mysteries of the Spanish economy.

Put to make a gift, Feijóo does not want to be taken for a stingy. His proposal raises the maximum amount to be deducted to 5,000 euros. It is intended for taxpayers with income of up to 60,000 euros. The median salary in Spain is 20,920 euros gross per year.

In a country where people have to use more years of salary than ever to access a home, where social rent is ridiculously low, except in the Basque Country and in that interest rates have caused a clear increase in mortgages, the PP prefers to focus on the middle and upper-middle class who can already access the mortgage market on their own. For everyone else below, only prayer or lottery remains as an alternative. If they can’t afford admission, they’re eligible for a credit.

It is therefore a clearly regressive measure. High incomes are the ones that can benefit the most, even more so with Feijóo’s proposal that has raised the ceiling to 5,000 euros.

J. Ignacio Conde-Ruiz and Juan F. Rubio-Ramírez estimated in 2012 that the deduction had cost the public coffers in the previous ten years 53,000 million euros (around 5% of GDP). More or less the same as administrations and universities are spent each year on education in Spain. After the change of 2013, the State currently stops entering just over a billion a year.

“There is a broad consensus among economists and international organizations (IMF and OECD) in the fact that increasing deductions for housing has a direct effect on the rise in its price,” explained the two economists. Which means that it will hurt those who try to buy a house in the future. Not surprisingly, both believed that recovering the deduction was “a bad idea.”

Housing developers and banks would be the most direct beneficiaries of the existence of the deduction, as well as logically the taxpayers who would thus reduce their tax bill.

A study conducted using data from Denmark revealed that didn’t even make it increase the number of people buying homes in the late 1980s. What he did do was make the houses he bought more expensive on average.

The person responsible for the idea is none other than the politician himself, Núñez Feijóo, who usually accuses the Government of increasing the public debt to levels unknown up to now. “Since Sánchez arrived, your government costs us 6,000 million euros of debt each month, ”he said in January. “It is evident that living by issuing public debt is easier than meeting the deficit and not increasing the debt.”

It is said by those who ask to lower almost all taxes and who affirm that everything will be solved by reducing spending on institutions, another populist detail because the citizen will feel that this does not directly affect his pocket. The leader of the PP alleges that “there are some 25,000 million euros of debatable justification” in the latest budgets.

How easy it is to balance the accounts in your mind if you manage to convince people that there are tens of billions available totally free with which life will be wonderful and they will not have to worry about anything else.

How to doubt the generosity of populism. A housing law? Much better to give money to those who already have money to buy a flat.

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