Casa Santo Estevo

Have you heard that José Luis Rodríguez Zapatero wants to increase the IVA in Spain. This is evidently to help us all and cover increasing amounts requested for "social payments" etc.
it is also rumoured that Petrol, alcohol and tobacco will increase too.

Tele Addict

Mate, the money has to come from somewhere, it's nothing personal. It's not as if the money is going in Zapatero's pocket. If you feel really upset though you could always go on a PP demonstration and link arms with Fraga.

cricketman

They havent decided yet, but it is likely that IVA will increase

http://www.elpais.com/articulo/econo...lpepieco_1/Tes

I've also heard that tax on savings will go up, but no confirmation yet.

As Tele Addict said, tax increases are needed. Revenue from income tax is down due to high unemployment and revenue from property sales tax is down due to low sales. Property tax at one point made up an incredible 50% of governmental income!

Tough times

Casa Santo Estevo

So why do some countries help by reducing taxes and other up them...less folks have to spend the less your income will be...the more want state help..it is a circle downwards.
lower prices and make everybody seem better off.
Maybe your idea to March with Faga is a good idea, after all he is the father of the Spanish constitution and has helped Spain to turn the corner before so he can do it again.

cricketman

Excellent question!

In that El Pais article, they said Zapatero was being criticised by The Economist for increasing revenue via taxation rather than by printing money (quantitative easing)

The Anglo-Saxon model at the minute favours printing money so making the pound and dollar worth less. So effectively stealing from the general public...
Spain are using the traditional socialist model of increasing taxation. So effectively stealing from the general public...

Only time will tell which will have the most effective solution. Increasing taxation is actually a very brave model as consumers see it immediately. When you print money the loses are hidden to your average tax payer/voter.

If (and a big IF) the Eurozone wont be printing money then we will only see the pound weaken against the Euro. Parity here we come! Of course, Zapatero doesnt have a say in that as it is done by the ECB!

Tele Addict

The answer is simple, some countries borrowed lots of money to cover their shortfalls (Britain for example) and they will be paying for years. In Spain things are different. Some people are affected by this crisis. Some are not and still have as much money to go out spending as before. Some are even better off. Taking a bit extra from these people rather than borrowing it will save us all from paying interest for decades.

Casa Santo Estevo

I like the rest of you do not have an answer, but I have enjoyed reading your thoughts...I can also see the problem with the UK way out of the hole too.
I have not been back to the UK for many years so I cannot see what is happening out on the street, so to speak. But what I have noticed here in Spain that folks are downsizing and there is less activity in shops and on the roads. Recently went back to The Netherlands and noticed that shops have some real bargains ie prices are lower beacuse the retailers are trying their hardest to entice the shopper back. Although I have seen sales up here to be honest the prices have not been so low as one would expect.

Econ

Hummm..... much more activity as far as Trafico are concerned, it didn't take Zappatero much time to see how he can fill the government coffers with money from speeding fines, even to the extent of altering speed limits on motorways and reducing to 80K in some silly situations. I noticed speed signs the other day going past Granada where the speed was reduced to 100, 500 meters later back to 120 and then 500 mts further along back to 100... for no reason at all, not even a turn off as one of the situations on motorways now for sticking up a 100K sign. Tunnels are down to 80 in Malaga and Granada provinces! much more opportunities to give people 150 euro fines and get the money that the EU no longer gives them. grumble grumble

spainrico

Exactly right, there was a financial expert (not government) making this point of the Spanish CNN freeview channel last night. He also commented how much money people have saved over the last 12 mths- perhaps now they need to spend some to get things moving...

Tele Addict

What's all this got to do with Zapatero? For a start if you don't break the law you can't be fined. Anyway the budget for the Guardia Civil has been reduced, so it's not a government fund raising exercise. Internally the Guardia voted to take a pay cut rather than face lay-offs. Any extra fund raising duties are for their own survival.

Regardless now the holiday season is over all the controls have disappeared, around here at least.

Lenox

IVA would perhaps go up (according to El Mundo) to 19% - which should do wonders for the sale of calculators - if nothing else.
The Economist article 'Taxing Times' is here.

Econ

Sorry, but it is a government fund raising exercise!

BTW, I have no problem with people who break the law getting their just deserve, I however do not believe in picking on the motorists because they are an easy touch for money, happens throughout most of Europe and now sadly happens in Spain. There are more criminals and as big/bigger problems with other crimes in Spain, yet those criminals are not persecuted because no money can be made from them and then it costs the government money to put them in jail, it is a matter of principal.

Controls in Granada and Almeria and Malaga haven't disappeared, not up to 2 days ago anyway.

Fredbargate

To go slightly off track.

An increase in IVA will help Gibraltar's economy

It will also increase the frontier queues

which will upset Juan Carlos Juárez, the mayor of La Linea.

Casa Santo Estevo

I too wondered how Zap. Is connected with speeding. It is like say Brown is connected too. However the cameras and Speeding policy is dictated by others. Hopefully both have more important things to do then sit down and say I want a camera here here and here.
But cameras and safety measures are not related to the increase in IVA.


How will an Increase help? we do not know how much the rise will be and the blanket rise (suggested above) to 19% will be impossible or dam right foolish as Spain has several layers of IVA ranging from 4% and upwards.

Tele Addict

Maybe this is just a Ryan Air strategy (get ideas out there, pay for toilet, standing passengers, etc) to get the public talking. Later introduce lower revenue raising measures (charge for baggage and check-in, etc) so the public aren't so shocked. In this case maybe the government is talking big rises but will introduce small ones, the public can then say "phew" the socialists are great because they haven't introduced any big tax hikes.