Spain’s Supreme Court has recently issued a ruling on the matter of which administration has the power to manage the funds raised by the 0.7 per cent of income tax which Spanish taxpayers are allowed to earmark for charities, the Catholic Church or the State (or any combination thereof). This new ruling marks a shift away from the jurisprudence set forth by Spain’s Constitutional and Supreme Courts, with thirteen prior rulings on the issue.
Considering the new legislation passed in Madrid, the Supreme Court has ruled that it is Spain’s government —and not Catalonia’s— which is expected to manage the funds and is allowed to do so as it sees fit: namely, by prioritising the kind of charity projects that are conducted Spain-wide. A little thinking on the 0.7 per cent will give us some insight into the huge conflicts between Spain and Catalonia.
Firstly, there is the matter of powers and legitimacies. While the Spanish Constitution clearly establishes that it is the regions that have the power to administer these funds, Madrid has ignored every court ruling that confirmed it and has not stopped until the law that set the goals, scope and distribution powers has been amended. The Constitution does not protect us well enough. And when it does, the State perseveres until we are no longer protected. Madrid re-interprets the Constitution for its own ends. The State is working against us and its desire to recentralise has become a overpowering, pervasive pulsation. The difference between Catalonia and other Spanish regions is that we have our own alternative project and we can fill with content our own devolved powers.
Secondly, a matter of political philosophy. Not only is there a thirst for recentralisation, but for big government. If there is no doubt about who the Catholic Church is and that the funds alloted to it by tax-payers are transferred to a well-defined recipient, why not do the same with the funds destined for charity projects and such-like? Some of our neighbouring countries in Europe do precisely that and it would be the most reasonable course of action. It would empower the public and the groups that strive to help those most in need.
Thirdly, a matter of territorial equity. In 2014, the State collected €54.4m in Catalonia for this item but only €30.8m was paid back. Initially, the discrepancy between the amount raised and the outlay comes as a surprise. It is actually a quick sample of how brutal the fiscal deficit is between Catalonia and the State: Madrid only returns 56.6 per cent of Catalonia’s tax revenue. If Madrid agreed to collect taxes according to the taxpayers’ income per capita and to allot funds to the regions according to their population, Catalonia’s income per capita would be 77 per cent higher than the overall Spanish average. But the 2014 figures from Spain’s National Statistics Institute (INE, in Spanish) show that Catalonia’s GDP per capita (no regional income per capita data are available) is only 19 per cent higher than the Spanish average. Adjusted for purchasing power parity, the difference is only 10 per cent. As ever, Catalonia’s fiscal deficit far exceeds what would be justifiable by any measure of regional solidarity based on paying according to income and receiving according to population. Let us take it a step further. Is it ok to distribute according to population instead of by region, as the Catalan government demands? The funds raised in Catalonia are what Catalans wish to use for additional social work in Catalonia. The principle of subsidiarity states that, whenever possible, policy decisions should be made at the level nearest to the people. Isn’t social work precisely one of the areas where this principle is most valid?
Fourth, a matter of survival. The European Commission has just published a social progress index based on the averages for 2011-2013. According to this index, Catalonia’s most basic needs (health care, housing, hygiene and public safety) were the worst catered for in Spain, after the Canary Islands. Catalonia has become poor but the State refuses to admit it. The system whereby public resources are shared continues to regard us as a wealthy region when, in fact, we have just as many poverty and welfare issues as anyone else. The question of the 0.7 per cent illustrates the problem in a simple way: as Catalans, we only get back 56.6 per cent of what we contribute. Madrid applies this percentage quite naturally, but it is a hurdle for the the progress of Catalonia’s citizens.
