Spain VAT Hike Largest In History; Stunning Ineptitude Will Make History Books

Fiscal deficits continue to mount in Spain in spite of austerity measures and tax hikes. Spain desperately needs work reforms, but on that score there has been little progress.

Instead, the government keeps hiking taxes to combat ballooning deficits, only to see further declining revenues in which the government hikes taxes again and again in an absurd attempt to make up for those shortfalls.

Via Google translate from Libre Mercardo please consider The VAT increase is the largest tax increase democracy.

Each Spanish pay an average of 20.8% VAT, 369 per year, six days of extra work to comply with the Treasury.

The VAT increase, which took effect on Saturday, raising the general rate of 18% to 21%, reduced from 8% to 10%, while the super-reduced-duty on-staples remains 4%. In addition, hundreds of products previously taxed at 4%, as school supplies, and 8%, such as film and hairdressers, pass it to 21%, nearly three multiplying its previous taxation.

But beyond these percentage increases, the increase in VAT means that a worker will pay on average 369 euros per year ditional this concept, a 20.79%, according to a study by the think tank Civics. Thus, the taxpayer will have to work six days a year just to meet its commitments to the Treasury.

In retrospect, it is "the largest tax increase in democracy", as it will reduce the disposable income of citizens even more than the increase of VAT by the previous government of Rodriguez Zapatero (192 per year) and the recent income tax hike approved last December Mariano Rajoy (137 euros) "together", the report warns. Successive increases applied to income tax and VAT since 2010 have undermined the middle class almost 700 euros per year.

Furthermore, according to the head of Research Civics, Cristina Berechet, this higher tax will not serve to raise more, and will restrict consumption and probably increase fraud. "The VAT rise is incompatible with some as high taxes to work, "he says.

Stunning Ineptitude Will Make History Books

Spain's unemployment rate is over 25% and the youth unemployment rate is near 53% yet the fools in the Spanish government hiked taxes yet again, this time by the largest amount in history.

Spain's handling of this economic implosion is sure to make the history books as a prime example of complete ignorance in how to deal with a fiscal crisis.

Flashback 2010

My friend Bran who lives in Spain writes ...

Hello Mish
Check out this YouTube Video Montage (in Spanish)  from Rajoy / PP in 2010.
Rajoy states raising the VAT would be a counterproductive stab in the back of fellow countrymen. No more VAT hikes was a key election promise.
Bran.
 

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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