Families allocate on average around a third of their income to paying taxes in Spain. These are the estimates made on the taxation that households bear, from personal income tax or VAT to fuel tax or IBI. It is the first time that a general x-ray of the impact on the family economy of the taxation of the different administrations has been made and it has been prepared by the General Council of Economists-REAF.
The work analyzes four types of household models with real data from the INE and what part of their total income is allocated to paying taxes: single person (33.6%), couple without children (35.4%), couple with one child ( 31.7%) and couples with two children (31.7%). The president of the General Council of Economists, Valentín Pich, gave the example that a family made up of a couple with two children with a monthly income of 3,639.75 euros would pay 1,153.42 euros in taxes, which is equivalent to the aforementioned 31.7 % of your monthly income.
Pich added that “continuous regulatory and fiscal changes generate high uncertainty among taxpayers,” which is why he believes that greater transparency is necessary about what is actually paid to the Treasury. “With this study we have tried to make a first approximation to what we have called the complete tax bill faced by an average Spanish household, with which we have tried to show a general picture of the tax burden that a typical household supports,” he said.
The taxes that have the greatest impact on the family economy are personal income tax and VAT. If social contributions are added, the amount represents 85% of the total invoice.
The most common type of home in Spain is that of a couple with one child. In that case, on average 37,438 euros are deposited. Of that amount, more than 5,000 euros will pay personal income tax, while Social Security takes about 2,400 euros and the VAT paid when purchasing products, another 2,400. The fourth most burdensome tax is that of fuels, with almost 700 euros. After this are tobacco and real estate, with about 400 euros each. These data show that although the tax burden is always mostly associated with personal income tax, the rest of the taxes can represent an equivalent amount. According to the director of the Studies Service of the General Council of Economists and coordinator of the work, Salvador Marín, the personal income tax payment of a typical household is equivalent to between 13.8% and 17.2% of income. And he adds that when other taxes are incorporated there is “an increase in the initial personal income tax rates of more than double.”
Researcher Myriam Rodríguez warned that the study data show that “when different types of households are compared, tax imposition could be regressive with respect to income, since those households made up of one or two adults have less income and a consumption structure different would bear a greater tax burden.” The report highlights that personal income tax functions as a regulator to avoid triggering the tax bill and is lower when the household situation is less comfortable. On the other hand, the bill for other taxes (such as fuel or IBI) is the same regardless of the income level.
The report demonstrates that personal income tax works to make taxation progressive. Thus, a family with a child with a low income (28,000 euros per year) pays 23.6%. On the other hand, a high-income family (income of 75,000 euros) pays 36.4%.
The work has also analyzed the tax imposition by communities, which yields expected data, with Catalonia in the high band of tax pressure and Madrid in the low range. In relation to personal income tax, in Catalonia and the Balearic Islands the regional fee represents almost 52% of the total global bill, while, at the other extreme, in Madrid and the Canary Islands, the aforementioned regional fee represents around 47% of the total.
The report details that in the case of a single taxpayer without children and with the national average income, the difference in the nominal personal income tax quota between autonomous communities can be considerable: 338 euros when the maximum quota is taken (3,435, in Catalonia) and We compare it with the minimum (3,097, in the Canary Islands). Now, if purchasing power parity were introduced, the differences between communities would increase. The largest difference is 1,166 euros, if the maximum fee paid (Extremadura, 3,888) is compared to the lowest (Madrid, 2,722).
