The Madrid Assembly has appealed to the Constitutional Court against the central government’s tax on large estates. The People’s Party initiative, supported by Vox in the March 2nd plenary session, is the second attack on this tax promoted by the President of the Autonomous Community of Madrid, Isabel Díaz Ayuso. The regional government also objected on February 1st to the new solidarity tax on large wealth created by Prime Minister Pedro Sánchez, which will affect large wealth of more than three million euros. It is the first time that the Assembly has appealed to the Constitutional Court.
The chamber’s lawsuit alleges that the tax hampers the region’s financial autonomy by blocking the wealth tax bonus that includes regional regulations. The complaint is based on the fact that the Organic Law of Financing of the Autonomous Communities (Lofca) recognizes the power of the Autonomous Communities to administer the taxes ceded by the State. The initiative also specifies that the processing of the solidarity surcharge was fraudulent because it was introduced by an amendment “unrelated to the amended text”, as described in the declaration of the Autonomous Community of Madrid, and that this excluded the possibility of a debate in the plenary session the camera.
According to the statement, the document submitted to the Constitutional Court also states that the tax violates the “principle of equality that must inspire the tax system […] by introducing a different legal treatment of citizens, which does not take into account the economic capacity of the taxpayer but the tax residence” given “the different existing regulations in the Autonomous Communities”.
The statement also explains that the text, like that presented by Ayuso on behalf of the Community of Madrid, claims that the central government tax affects legal certainty because the tax came into force on December 29, 2022, just three days before the start of the survey at the turn of the year. They also criticize the retroactive effect of the regulation, which applies to the rest of the year and prevents “taxpayers from having effective knowledge of the applicable and current regulations”.
The Autonomous Community of Madrid has been fully subsidizing the wealth tax since 2008, one of the hallmarks of the fiscal policies of the popular masses who have come to power in the region uninterruptedly since 1995. Pedro Sánchez’s executive has been suing the community for bets on tax dumping to attract big taxpayers from other regions to apply those policies since 2019, and now Ayuso is interpreting the new tax as a way to damage the interests of the region and its wealthiest taxpayers.
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