Updated Friday,17November2023-02:02

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Spain is the country in the European Union where the tax burden has risen the most since 2019. None of the other 26 nations that make up the EU has experienced such a strong rebound in this economic indicator, which includes the tax burden and social contributions. In 2019, the Spanish figure was at 35.4% of the Gross Domestic Product (GDP), and in 2022 the figure was 38.3%, almost three points higher. Along the way, a pandemic, an unprecedented economic crisis and the government's firm decision to continue raising taxes.

The increase is much higher, for example, than the 1.3 points that increased pressure in Portugal or the 0.9 points in France. And it contrasts much more with the reduction of 5.3 points recorded in Denmark, the point less presented by Ireland or the 0.2 points that increased the pressure in the EU as a whole. These figures published by Eurostat, and collected yesterday by the Foundation for Applied Economics Studies (Fedea) in the document The Fiscal Pressure in Spain and the EU, also show that this increase in the Spanish figure has focused, to a large extent, on families. In the middle class.

Income tax revenues have increased by 1.9% of GDP, "in which personal/family taxation explains just over sixty percent of the total [1.25% GDP]," explains the report signed by Miguel Ángel García Díaz, associate researcher at Fedea and former Deputy Minister of Employment, Training and Labor of the Junta de Andalucía between 2019 and 2022. And it stresses: "Personal income is the heading that has assumed the highest percentage increase in the tax burden [41.4% of the total], mostly due to the non-updating of the rate and personal deductions of personal income tax".

That is, the government's repeated refusal to adapt income tax to inflation is the ultimate reason for the sharp increase, and that this refusal to deflate the rate has very directly affected households during the complex process of pandemic, crisis and recovery. María Jesús Montero's Ministry of Finance has always ignored this reality, which has been pointed out by many economists and which is now highlighted by Eurostat data and the Fedea document. The Treasury replies that a deflation would benefit all taxpayers, the rich, middle class and the working class, and that they prefer more selective measures such as the reduction of VAT on electricity and food, for example.

The Council of Economists warns

And, in any case, this (hidden) increase in pressure through personal income tax and in the tax system as a whole fits perfectly with the objective of the Executive. In fact, they estimate that there is still ample room to raise taxes as they want to reach the EU average, which in the case of the tax burden is 41.2%. For this reason, due to the primary objective that the Executive has set itself of increasing the available resources and making more taxes paid, the Registry of Economists and Tax Advisors of the General Council of Economists stated yesterday that the Temporary Solidarity Tax on Large Fortunes "is here to stay". That it is going to become permanent, something that on the other hand PSOE and Sumar already advanced in their government pact.

At a tax conference organised in Tenerife, the president of the organisation, Valentín Pich, nevertheless lamented this voracity of the Government. "For too long we have been burdened with this 'to the rich, to the rich, to the rich', in which every measure that is announced seems like a punishment and it does not seem that they realize that what is being punished is the productive fabric and investment," he said.

"We are in a globalized world, where all countries have more or less the same tax regime. The most serious thing about all this is that it generates a permanent fiscal racket and the actors do not know what awaits them from the tax system. This noise is not liked internationally because it influences spending and savings, and greatly conditions the climate when it comes to investing," Pich added in a warning that, in all likelihood, will be ignored by the new government of Pedro Sánchez.