High incomes save 3,600 million with government aid: 75% more than low incomes

The main fiscal measures that the Government has approved to alleviate the effects of inflation represent, according to the Bank of Spain, a fiscal saving of just over

euros for households with higher incomes.

A very remarkable fact that, in addition, far exceeds the benefit registered by households with lower incomes.

, specifically, since in this second case the savings remains at 2,000 million.

That is, those who are considered "rich" by the Government benefit more than the working class and, of course, the action goes in the opposite direction to what the Executive always defends and to that maxim that "who else has more , the more you have to pay."

The Independent Authority for Fiscal Responsibility (AIReF) or Fedea had already pointed out this situation, and the body led by Pablo Hernández de Cos not only certified it yesterday in an Economic Bulletin but also went further by analyzing in depth three of the star measures of the Executive: the reduction in VAT on electricity and gas, the reduction in VAT on basic foods and the discount on the price of fuel, which together have

.

Starting with the reduction in electricity, which the BdE recalls that it was applied in July 2021, when the tax was brought from 21% to 5% and will last until December 2023, while the change in gas will go from October 2022 until the last month of this year.

"The total budgetary impact on households as a whole is estimated at 5,871 million euros, of which the top three deciles of income - that is, 30% of households with the highest income - would have benefited from tax savings

euros, compared to 1,484 million in the three lower deciles, a 39% difference that is due to the fact that higher-income households spend more on these goods in absolute terms, ”develops the organization.

Therefore, not only high incomes benefit more than low incomes from this measure, but so do middle incomes as they obtain savings of 2,300 million.

The BdE, yes, adds that in relative terms the savings for households with less income is higher.

Something similar occurs with the reduction of the Value Added Tax on food, which "has a greater impact on households in the top three deciles [240 million], compared to households in the bottom three deciles [142 million]."

«

, is more pronounced than in the case of the VAT reduction for gas and electricity», emphasizes the Bank of Spain, which continues to point out that «the relative impact on low-income households is higher and decreases with income.

This action, which includes the reduction of foods such as olive oil or pasta from 10% to 5% and others such as bread, milk or eggs from 4% to 0%, "was approved for a duration of six months , starting in January 2023, although it would end in April 2023 if core inflation in March were below 5.5%”.

Its total impact will be 645 million.

And as for the reduction of 20 cents in the liter of fuel, the Bank of Spain certifies that it benefited more, both in absolute and relative terms, higher-income households.

The budgetary impact was 3,065 million, and "

, accumulating the three upper deciles a bonus of 1,377 million euros, compared to 472 of the lower deciles, 192% more ».

Unlike the two previous measures, it can be seen that the relative impact was also greater in higher-income households, consistent with consumption patterns, in which lower-income households spend a smaller proportion of their total spending on consumption. of fuels”, he certifies.

Precisely for this reason, the Executive decided to put an end to the universality of this aid and limit it to professional carriers.

The document also points out that the three measures "present a design of a generalized nature, affecting the majority or all of the households", and proposes two alternatives.

Both are based on "making a

so that they are compensated for the elimination of the three generalized measures considered", that is, a kind of new check, which would have a lower cost by excluding the higher income households.

The first would be a transfer of 375 euros to each vulnerable household, "this amount being equal to the average benefit received by the first three deciles as a result of the three generalized measures that would be eliminated," explains the BdE.

The disbursement would be just over 2,000 million, so it would allow savings of almost 7,500 million.

And being more ambitious, the body proposes another transfer option to each vulnerable household of 860 euros.

"This amount results from distributing half of the budget savings from eliminating the three previous generalized measures [4,790 million] among households in the first three income deciles," the report concludes.

According to the criteria of The Trust Project

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