Thursday, December 06, 2007

It’s a national holiday today and the day after tomorrow is Saturday. So, naturally, millions of people will take tomorrow off and get together to celebrate the long break in an even longer traffic jam. With excellent timing, the Spanish government has demanded an opt-out from a looming EU law change – driven, of course, by Germany and the UK – which will increase the working week to 45 hours and allow a max of 60. “Spanish people don’t want to work this much”, the government is reported to have said. Actually, my impression is that some of them – e. g. waiters and waitresses – already do.

Over the last year here, 30,000 people have sought official self-employment status. This is not a move to be taken lightly as – even if you have no income – it obliges you to pay 300 euros a month in social security taxes. But it may not be quite the entrepreneurial rush it seems; the crash in the construction industry means that many carpenters, electricians and, yes, plumbers are being compelled to re-consider the inferior option of working for Joe Public. Light at the end of my tunnel?

Still on the topic of property – Like all pyramid selling situations, the key is to get out early, before the suckers are left to pick up the losses. And so it is that those who speculated towards the end of the boom by investing in yet-to-be-built properties now face having to finance a large mortgage as their chances of selling on have disappeared. Such is their desperation, it’s reported you can now get 50% discounts if you bypass the agents and deal direct. But who would do this to such lovely people?

To end on a happy fiscal note – The current [socialist] government has stolen some of the opposition’s clothes and announced it will end Spain’s wealth tax if it’s returned to power next March. Strange to relate, Galicia ranks 5th as regards this tax - after Cataluña, Madrid, Valencia and Andalucia. This is quite a contrast with its customary position in the bottom 3 of most of the never-ending lists of regional comparisons here. I wonder what it tells us.

3 comments:

Silvia said...

Colin,
You said: "it obliges you to pay 300 euros a month in social security taxes".
Almost but not quite. The social security payments are indeed extremely high when you compare it to setting up as a sole trader in the UK. However, it is not correct that it is 300 euros a month for everyone and all. Your payments are calculated on the basis of your income. There are a number of ranges, the lowest one being 185 euros a month. Still pretty steep, if you ask me.
Cheers,
Silvia

Mark said...

Portugal is almost as bad. Why would anyone want to set up as self employed in either country? Perhaps that's the purpose of such legislation. Can't have too dynamic an economy or people not dependent on a huge state bureaucracy.

David said...

Funny thing that wealth tax. According to David Searle´s book "You and the Law in Spain" I calculated that my meagre "wealth" meant I was liable for a few hundred euros tax. I dutifully trotted off to the Hacienda and after an hour declaring my pension and everything I owned, was told (ever so politely) to bugger off and not to come back. Perhaps doing away with a tax that nobody collects is no bad thing