'Coronataxes' to sustain public finances
The Spanish think-tank Fedea releases a report with tax-related proposals in respect of the coronavirus crisis. Once the worst of the crisis is over, temporary “Coronataxes” are proposed to finance the extraordinary expenses caused by the pandemic and reactivate the economy. In the long term, it recommends a series of permanent and structural reforms to improve state finances. In both cases, public spending would need to be rationalised.
The authors consider the fairest and easiest way to apply “Coronataxes” would be “through a surcharge on the personal income tax (PIT) that would be in force for a limited period until a certain balance is reached in public finances”. The PIT would be a general progressive tax and have these favourable features to fulfil its purpose:
The report provides a thorough long-term overview of permanent measures and reforms, which should aim to balance the structural deficit between revenue and public spending. Some of these measures would be: