Spain is one step away from closing the year with a record collection. The final figure will not be far from the 210,000 million euros that the previous Executive drew in the Budgets for this year, according to the Thermometer of the Tax Agency until August. It will thus surpass the 200.676 million mark registered in 2007, in full real estate bubble. At that time, the Great Recession was only a ghost and the country lived with unconcern, oblivious to the phenomenal crisis that was about to explode, a financial crash that left the walls of the public coffers chipped and a country in tatters.
A decade later, the public funds shine again as never before. There are two significant facts that explain the rise in public income, along with the five years of economic recovery, three of which Spain has grown above 3%: on the one hand, there is the good harvest of the IRPF, the first tax in importance in Spain. This tribute chains three years in maximums in spite of the fact that in Spain there are still almost 1.4 million workers missing from the time of the real estate boom. How is it possible to raise more with fewer workers? The explanation for this anomaly is that, despite the fact that the total salary income is still somewhat below the years of wine and roses, pension income is 51% higher than in 2007. That is, in Spain there are almost a million more retirees than a decade ago and they charge, on average, more than then. Retirees who join the system now receive a more generous pension and pay more.
To illustrate this phenomenon, one piece of information suffices: pension income rose to 88,803 million euros in 2007; a decade later they reached 134,086 million, according to the official statistics of the Treasury. And these retirement benefits pay taxes.
In addition, although there are fewer workers than before the recession, the unemployment protection system serves as a cushion to maintain rents and leads to the collection of income tax. And, finally, salaries are starting to rebound. "The main reason for the growth of income in 2018 continues to be the IRPF, thanks to the withholding of work. To the growth of this income due to the increase in employment, the recovery of the average salary and the effective average rate observed since the beginning of the year, the good result of the annual declaration was added since last month and since August the impulse derived from the increase of public salaries and pensions after the approval of the Budgets this year, "says the latest monthly report of the Tax Agency.
The other cause that explains the great moment that the collection is living is in the contribution of VAT. The rate hikes approved in 2010 by the Zapatero government and later in 2012 by the Executive of Rajoy raised the general rate to 21% and boosted the income of the main indirect tax despite the fall in consumption, which has not yet recovered. pre-crisis levels. The contribution of this tax last year amounted to 63,647 million, almost 15% more than in 2007, the year in which so far more money has been obtained by the Public Administrations for taxes.
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During the first eight months of the year, this tax on consumption recorded a growth of 11.5% with respect to the same period of the previous year. This evolution, however, is affected by the entry into operation of the Immediate Information System (SII), a computerized tool that requires large and medium-sized companies to present their VAT declarations to the Treasury immediately and that displaced income from the last year to this. Even so, the evolution of the tax is still very positive.
So far, the fertility of these two taxes was not enough to alleviate the decline caused by the crisis in the corporate tax. The figure that taxes business profits is the only one that has not yet recovered pre-crisis levels. Raise half that then. There are several reasons that explain it: companies keep on their balance sheet their sequelae of the crisis, which they use to reduce their tax bill, the so-called tax credits. In addition, 10 years ago real estate and banks contributed much more to the system, because they recorded record profits. Today, construction companies are still healing the wounds of their excesses and banks are struggling to achieve returns with interest rates on the floor.
For that reason, the fiscal proposal of the PSOE and Unidos Podemos is to raise the collection of this tax by means of an increase to the big companies. With the fiscal battery of the agreement of the parties of the left and the fruits of another year of economic growth, the tax collection can shoot beyond the 225,000 million in 2019.
Although the volume of tax revenues reaches historical highs, it would be necessary to ask if they are sufficient to finance public policies. Experts explain that the level of public spending is determined by the preferences of citizens. When they elect parties of the left, they show their predilection for policies that expand the welfare state. And, on the contrary, when they opt for conservative formations, they show their predisposition to reduce the size of the public sector and lower taxes.
"We do wrong if we only look at the gross figure," explains Nacho Álvarez, secretary of Economía de Podemos. "It is true that in absolute terms we raise more, but in relative terms we are below," he adds.
There is a thermometer that helps to understand the dimension of spending and public revenues: the international comparison. Spain has a level of income equivalent to 37.9% of GDP, eight points below the EU average. If Spain wanted to equate to the countries of the eurozone it should collect about 80,000 million more per year.
"When we compare where we have shortcomings in relative terms we see that in Spain we have a lower weight of direct taxation over indirect taxation," Álvarez explains. Precisely, direct taxes (IRPF and companies) are the most redistributive. This professor of Economics points out that a large part of the differential is in taxation of capital, which is why he advocates raising it.
The increase in revenue has allowed the level of pre-crisis public spending to recover in many areas-a not insignificant level considering that people lived in a bubble-but public policies require more and more money. Inflation, the aging of the population, growing inequality, the need to help the losers of the crisis and other factors demand more public spending.
The chapter that has stuck a bigger bite to the rise of resources in recent years is that of pensions. Currently, some 35,000 million more are destined for retirees than in 2007. Something that explains, in part, the fierce political debate on this issue.