The increase and materialization of certain risks for global growth throughout 2018 have worsened the outlook for the coming years. In Europe, Brexit will continue to represent the main political risk facing the region during 2019. The business strategies to deal with it necessarily differ depending on the considered scenario. Among them, the possibility of a hard Brexit in 100 days must be accounted for.
The Government has publicized several draft laws on tax matters, which will be completed with budget bill for 2019, including upward changes in Corporate Tax. The intention of this tax adventure is the financing of public spending, reckless in domestic and European terms. The changes are not certain, because they need parliamentary maneuvers not discussed here.
The Spanish economy is immersed in a downturn phase of the expansive economic cycle, with more moderate variation rates. According to estimates in Equipo Economico, GDP will grow 2.6% in 2018 and 2.2% in 2019. These figures mean a downward revision with respect to our previous estimates, as a result of the change in external tail winds, lack of economic reforms since 2016 and the uncertainty generated in the last months by the messages on economic, budgetary and fiscal matters.
The fact of introducing an anonymous author in certain way is often used in narrative. But in this case I was highly inspired by the announcement of a minimum tax for corporations, due to such low effective rate observed in these entities in recent times, particularly in big corporations. As this note is inspired by traditional fables and parables, its aim is no other than giving a value judgment, meaning that it might not be shared neither agreed by all readers.
The conflict between development and redistribution is in the focus of the debates on the most appropriate economic policy. Quite often, the arguments in favor of the preeminence of one over the other are not so rooted in the analysis of the economic and social impact of the suggested measures, as on their popularity for the electors, with an increasing trend towards social duality. This social duality distorts the principle inspiring the creation of the modern state of law: charges must be approved by those on which such charges will be levied. This post poses three illustrative examples of such a situation.