Low public revenue: a structural problem, aggravated by COVID19 –

Sustainability of public spending.

COVID19 has as soon as once more placed on the desk a structural downside of the Spanish Administration: its lack of earnings. The pandemic has reworked it right into a dramatic difficulty to the extent that not solely cash for well being or training has to return out of the general public purse, but additionally short-term measures reminiscent of these of the ERTE.

You could suppose that this isn’t the time for a tax hike. I imagine, quite the opposite, that it’s time to analyze the construction of public income and the shortcomings that our tax system has to ensure adequate public spending and that, moreover, it’s financially sustainable.

In different phrases, relying on the significance of the Spanish financial system Does the State and the opposite Spanish public administrations accumulate sufficient? As a result of, clearly, earnings and public spending are parallel magnitudes: the extra you enter, the extra you may spend.

Subsequently, the query we should always ask ourselves isn’t whether or not pensions (or training, or well being, or analysis) are sustainable or not, however quite the opposite Does the State do what is important to gather sufficient? And the comparability framework could be very easy: the European Union. The info from the neighboring international locations will give us an actual thought of ​​what the earnings coverage of Spain is and whether it is adequate to satisfy the spending of the welfare state.

Spain has a a lot decrease tax burden than the European Union common. And it collects lower than the European Union. If we take the info from the Statistical Workplace of the European Union, we’ve the next knowledge: the typical proportion of tax assortment as a operate of GDP is greater than 41.3% and in Spain it’s 34.1%. For essentially the most half, tax credit for sure teams decide this abnormally low assortment primarily based on the Gross Home Product.

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