What is Tax Reform?

What Does Tax Reform Mean

Reform is the mechanism and consequence of reforming , a verb that refers to changing something or forming it again. Prosecutor , for its part, is that which is linked to the treasury (the state agencies empowered to collect taxes).

A tax reform , therefore, is a process or a provision that modifies the tax law . The Legislative Power is in charge of changing the laws or developing new norms, which must be promulgated by the Executive Power .
Tax reform is always linked to judicial changes since taxes are established by law . The aliquots , levies and general characteristics of each rate must be specified in the legislation: therefore, raising or lowering a tax is associated with a legal change.

To understand how a tax reform works, you have to understand what taxes are. These are mandatory payments that the State imposes on its citizens to finance its operation. With the money that is collected from taxes, a government in charge of the state administration can invest in the construction of hospitals and schools, the development of roads, the payment of pensions, etc.
To avoid abuse, taxes are set by law. That is to say: a government cannot collect taxes according to its particular interests or wishes, but can only collect according to what is established by law. In case you want to modify any aspect of the taxes, you will have to promote, ultimately, a tax reform .
1845 tax reform
In 1844 a tax reform (also called tax ) was approved in Spain that laid the foundations of the tax system that the country has today. It all began a year earlier, in the summer, when Generals Prim, Narváez and Serrano commanded a military pronouncement that forced Regent Baldomero Espartero to leave his post and ended the progressive period that had begun in 1840.
With only thirteen years, Isabel II reached the age of majority (the normal thing would have been to wait another year) and another reign began. The decision was based on the desire for there to be one more regency , which would have been the third.
That same year, Manuel Cantero de San Vicente held the post of Finance Minister for a brief period, and it was then that he proposed to Ramón de Santillán that he create a Commission to rule on the reform of the tax system of the time; and he did so on December 18, the date for which Cantero was no longer a minister, but had been succeeded by Juan José García-Carrasco.

Before the tax reform of '45 became a reality, it was necessary to analyze all the possibilities, thinking about how the system would be affected, taking into account the historical and rational principles on which they should be based to take a similar step. The delivery of the opinion was carried out on August 5, 44, to Alejandro Mon, who had replaced García-Carrasco in the Ministry of Finance a few months earlier.
It was not easy for Mon to make a decision after evaluating the possibilities that the tax reform would give to the collection of taxes, and therefore it took him until January 10 of the following year to present it. Finally, in May 1845 it became a Law, and represented a profound change in Spain's tax system, since it broke with the schemes associated with the Old Regime.
In short, the 1845 tax reform prioritized direct taxes (taxes sources of wealth, income, or property directly) over indirect taxes (taxes consumption).

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