Taxation of movable capital: justified increase? | Legal

As it is known, another tax increase was added to the income of securities in the General State Budget Law of 2023. This increase in tax rates, which has been a classic in recent years, affects the income that constitutes the tax base of savings. In essence, dividends are returns from passive income such as interest, capital gains (transfers of mutual funds, shares or real estate).

Specifically, taxation of the tax base of savings between 200,000 and 300,000 Euros has been increased to 27% and a new section has been created that will be taxed at 28% for amounts over 300,000 Euros.

In fact, it is far from being an unpopular or politically risky measure (a rise in upper levels of passive income can never be, or what is sold as a tax increase for the “rich”). represents a notable cumulative percentage increase in recent years. For example, a return of €500,000 to be included in this tax base in 2023 will be taxed at an average rate of approximately 25.57%, 22% more than 10 years ago (not taking into account the supplementary tax to reduce the extraordinary public deficit). financial years 2012 and 2013). Not bad.

But, and although from the very beginning it is at least doubtful that it is a measure that really affects large movables, namely the richest (not to mention the tax advantages of well-known SICAVs, collective investment funds or, without going further and playing in another league from the two previous examples, 2023 A simple limited liability company to avoid the high bracket tax rates created for the company), I think one first thought is necessary: ​​are you right? this rise?

Let’s say at first, a quick read of the principles that govern our tax system, such as fairness, equality, equity, gradualism, seem reasonable at least. Likewise, when we look around us, the conclusion we reach is the same without any doubt. Of course, this is true if we compare ourselves with the taxation of movable capital income with European countries. outliers For a better interpretation, we find the tax rates below many of these neighboring states.

And as if that weren’t enough, for those of us who are stubborn and have trouble accepting it, some elite theories that live off this type of income, such as bragging about honesty that many already know, don’t help us. It has been stated by Mr Warren Buffet himself that rich people like him should pay “much more taxes”.

It is at this point, and just as he is about to succumb to the first reflection, a flash of light appears in the form of a second reflection, consuming a host’s arguments for not giving up. Ok, if we accept this increase in taxation of passive income as justified (and fair), is taxation of active income fair and just? Or in other words, what about those who keep the system afloat?

Yes, I’m talking about this middle class, whose income from work and economic activity, or the like, suffer from an overflowing increase in the tax rate of the general income tax base, let alone Social Security contributions. And what to say if he’s a lucky subject, like the CEO of a company that employs a significant number of workers, who gets high returns from that kind of performance? Let’s not deceive ourselves, although this type of taxation is hidden thanks to the catchy work of friendly typesetters, that is, employer companies, in some cases it can reach tax rates above 50%.

What if, in another example, the lucky person is a self-employed person, also known as a self-employed person, who has excellent year results and earns income from economic activities for which he has to pay taxes? Would you pay if the same return came from the passive income mentioned above? And it can be avoided or reduced by lowering rates, not to mention the loss of purchasing power caused by the tax effect of inflation. But this is from another song.

So tell me if we are in a context where we might consider the increase in taxation of passive income to be justified in the same situation. Is the current taxation of active income fair and equitable? Excuse me, but there’s something that doesn’t add up.

Arnau Farre Andreueconomist and partner in tax department ETL Global