I have a friend who pays more than a thousand euros a day in taxes. Saturdays, Sundays and holidays included. Smart as he is, he works all the hours he can, and enjoys doing it. He creates jobs, does not stop investing, and is one of those who believe that with his business activity he does a service to the country. I also have a classmate who knew from a young age what he wanted to be when he grew up: work little and have a lot of money. With a single business initiative, which he quickly divested, he has amassed a small fortune that he has not stopped growing, since his analysis of the stock market shortly before drinking vermouth. In his tax domicile there are none of those taxes or surcharges on income.
I estimate that they both earn more or less the same before taxes. But my friend, of all the income he generates, has a third left; to the partner, a little more than half. I can’t talk about fraud; The tax avoidance practiced by my acquaintance is as legitimate as my friend’s strict tax compliance. He, however, is now angry with me and with the Government of the country he loves for not favoring the abolition of estate and inheritance taxes, out of the feeling of “fiscal plunder” that, he says, he also suffers. From time to time I have to console him for the fiscal injustice he feels: the solidarity, the good public services that he recognizes and uses, that even big businessmen and the most liberal of the media, The Economist, justify taxing inheritances, and that paying taxes makes us good citizens. My other acquaintance has never listened to me. He declares himself a liberal and a citizen of the world, and let’s run. He doesn’t need public healthcare or education.
An academic can only judge without ideological bias the fiscal inequality, the economic inefficiency of it all. It derives from a tax regulation that has enough loopholes to entertain consulting firms and advisors advising how to pay less taxes. And with the added opportunity of territorial governments that do fiscal dumping. Faced with this, businessmen complain that they do not see their efforts to create wealth, reinvest, innovate and generate jobs compensated. They point out that they receive worse tax treatment if they are financed with their own resources than if they do so with debt, or that a reinvestment in the company has the same treatment as the purchase of a yacht. Some parties at home question my friend as the successful businessman that he is. My partner, only known in the Bernabéu box, has been offered to be part of the Spain brand. The world upside down.
As long as all this does not change, I can only remind my friend that with what he pays in taxes he makes social action possible, that with more tax capacity of his own the situation could be straightened out. That everything that he does not have in fiscal recognition of his contribution to economic well-being he will one day have in social recognition. So that you do not become discouraged, waiting for changes towards less inefficiency and more equity.
