The Economy of Catalonia

and to the private sector. Another part of these taxes, however, never returns
to Catalonia, being allocated to the funding of the Spanish State’s general
expenses and to solidarity with other Autonomous Regions of Spain.
In order to determine the amount of additional revenue that Catalonia
would obtain if it were to become a State, it is assumed that the present
tax system and fiscal pressure are maintained. On this basis, the additional
revenue obtained by Catalonia would be from the taxes that the
Catalans currently pay to the Spanish State, less the transfers of funds
made by the Spanish State to the Generalitat and to the Catalan local
governments, since such transfers would naturally cease to be made.
These transfers are recorded here as a new expenditure to be assumed by
the Generalitat, since it will have to cover them.
The data forming the basis of this study have been obtained from the
calculation of the fiscal balance between Catalonia and the Spanish public
sector in the period 2006-2009. Consequently, the additional funds
that Catalonia would have obtained in these years, if it had been an independent
State, have been estimated in accordance with the hypotheses of
the study, as explained below.
The methodology used to estimate the additional revenue that Catalonia
would obtain is based on the territorialisation of public revenue according
to what is known as the flow criterion. According to this method,
revenue is assigned to the territory where the economic capacity subject
to taxation is located. This is the system that most clearly determines the
tax revenue which is generated in Catalonia in consideration of its income,
wealth or consumption, regardless of who ultimately bears the tax
burden or of where the tax collection takes place, since these factors depend
on how the tax administration is organised.
In accordance with this methodology, the various types of taxes have
been allocated to Catalonia in the following way:
– Revenue generated by personal income tax: according to the
percentage represented by the Spanish State’s part of the tax- payable
figure in Catalonia versus the figure for Spain’s Autonomous
Regions under the common system.
– Revenue generated by corporate tax: according to the amount of
the gross operating surplus in Catalonia versus the figure for
Spain’s Autonomous Regions under the common system.
132 The Economy of Catalonia