It'll warm the cockles of Art Laffer's heart
Finance Minister Cristóbal Montoro told Efe news agency that low-earning self-employed workers — those who make no more than €12,000 a year — will have to pay lower income tax starting in July. The withholding rate once the reform goes fully into effect next year could be around 15%, compared with the current 21%.
The tax breaks announced by the ruling Popular Party (PP) are perfectly compatible with European Union deficit targets, said Montoro. This is because tax receipts are growing at over 5% this year compared with 2013, and also because all forecasts point at an economic pick-up in Spain next year. The government is predicting growth of 1.8%, although other analysts are talking about even higher growth.
The greater the output, said Montoro, the more taxes are paid and the more jobs get created.
Jobs, jobs, jobs!
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