In Spain, it seems that there will be no turning back and the awards of more than 2.500 euros of 'Loterías y Apuestas del Estado', including EuroMillions, will have to pay 20% in taxes by the part excedeed.
EuroMillions, lottery of certain European countries, is included in Spain through the LAE (Loterías y Apuestas del Estado). Previously, the LAE distributed the lottery prizes that were exempt from taxes as income tax, but since January 2013 it will be taxed at 20% all the prizes in excess of 2.500 euros.
For a prize of 3.000 euros, the tax would be 100 euros (500*20%).
For a prize of 400.000 euros, the tax would be 79.500 euros (397.500*20%)
For a prize of 25 millions, the tax would be 4.999.500 euros (24.997.500*20%)
This measure was announced by Finance Minister, Cristobal Montoro, in the context of measures to reduce the deficit.
Some experts say that this tax will decrease considerably the total collection of the lottery. In addition, also warn of the risk that would result in the collection down considering that 50% of the proceeds goes to the state coffers, so eventually would raise less tax than without it, although this will depend on reaction that citizens have when buying their weekly illusion from 2013.
Although I understand the need to reduce the deficit in the public coffers as quickly as possible in Spain, the sad fact is that this is just a prime example of politicians taking easy options. Sr. Montoro would have far more of my admiration, if he tackled the tax issues that would really pull the deficit down, such as the black economy. Of course the black economy itself has grown exponentially as people try to find ways to combat the historic highs on IVA rates, another ill thought through move.
ResponderEliminarThe popular 'Mish's Global Economic Trend Analysis' states of Spain's actions:
'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.'
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.
well said above...and what is being done to stop the exodus of the spanish people to find work in other countries--fill in the blank.
ResponderEliminarand what new ideas are coming forward to create more opportunities for young people to create smaller businesses with state support or investment as part of a start up scheme-money that can be clawed back at a later stage when the business has succeeded.
Needless to say there seems to be a government devoid of ideas, except the continuation self reservation and feeding those who already have enough and still want ore at a cost of those who have less!