Increase the tax burden This is a declared objective of the government of Pedro Sánchez. For the First Vice President and Minister of Finance, Maria Jesus Monterothere is enough room to increase collection by four percentage points of GDP, or around 60 billion euros. And since the socialists arrived in La Moncloa, they have wasted no time: Between 2018 and this year, they carried out 81 tax and social contribution increases.
This is clear from a recent report by the Juan de Mariana Institute, according to which the aforementioned tax increases resulted in an increase of 9.625 million euros in collection through taxes and 26.115 million through social security contributions. Furthermore, the failure to adjust taxes to inflation led to a “hidden increase” of 27.1 billion euros.
The Bank of Spain has already warned about this. According to the supervisor, the State has earned 11 billion euros more since 2019 thanks to do not deflate personal income tax rates with inflation. The inflationary spiral, combined with the good performance of the economy, has led to a general increase in wages. This means changing the income tax bracket, so that more taxes are paid, while increasing wages does nothing other than offset rising prices.
Until personal income tax rates are generally deflated, the cold progressivity. Concretely, if tax collection increased by 2.5 percentage points of GDP between 2019 and 2023, 1.5 points comes from personal income tax revenue. And half of them can be explained by cold progressivity and not having deflated rates.
Returning to the report of the Juan de Mariana Institute, the think tank points out that, although some downward changes to certain taxes have been approved, in most cases these are “one-off bonuses”, such as the reduction of VAT on basic food products. “In net terms, For every euro spent on tax relief measures, 3.4 euros increase in tax collection was adopted” says the document.
Europe Press
According to the report data, Spain is the third country in the European Union (EU) to have increased its tax burden the most between 2018 and 2023.. Concretely, it experienced an increase of 2.9 points in GDP, contrasting with a drop of 0.8 points on average in the Twenty-Seven.
However, it should be noted that The tax burden in Spain stood at 36.8% in 2023 of GDP, behind Germany (40.1%), Italy (41.5%) and France (45.4%). Likewise, the increase in pressure between 2011 and 2018 (under the governments of Mariano Rajoy) was 3.1 percentage points.
Tax reform
Today, the government is doing everything possible to undertake a tax reform on which the fifth installment of European funds depends. New generation. An initiative which, according to the Juan de Mariana Institute, would mean 46 more tax increaseswhich would be added to the 81 already carried out in recent years.
“The PSOE has proposed up to 46 new collection measures in 2025, most focused on further increase the tax burden borne by businesses and families” says the report prepared by this think tank. However, it also indicates that “the precarious parliamentary calculation on which the government is based makes it difficult to predict which of these measures will ultimately come into force.”
Europe Press
All of the measures announced – within the framework of separate agreements with Junts and PNV, on the one hand, and with Sumar, on the other – aim to increase public revenues by around 8 billion euros. At the same time, the report continues, “the socialists have put on the table two tax relief measures which would only have an impact of 0.6 percent on revenues.”
However, at present, the agreed measures are on hold. All the government’s left-wing partners have called for the extension of the tax on energy companies to be abandoned, and even Sumar reneged on his own agreement less than 24 hours after making it public. At the same time, the PNV exploded because of the “straitjacket” of the negotiations, anticipating a predicted failure.
