No anguish is observed in the face of the electoral result, a situation that allows us to address aspects that we always leave on the back burner. For this reason, we must welcome the publication of the seventh Fedea report (2019-20) on the distribution of taxes and benefits for Spanish families. The study, prepared by professors Julio López, Carmen Martín and Jorge Onrubia, is a rigorous exercise that, using information provided by the ECV (Living Conditions Survey), evaluates the balance between payments made for different levels of household income ( taxes of all kinds – personal income tax, VAT, wealth, companies – plus social contributions) and income received, both monetary (pensions, unemployment, illness, study or housing aid) and in kind (fundamentally, education and health).
I recommend reading it, because it illustrates a debate that we never entered seriously: to what extent do we pay too many taxes and how the public sector affects inequality. What are the main conclusions of the work?
80% of households receive more than what they contribute, concludes the Fedea study
To understand them, it is worth remembering that families receive a first income from their participation in production in the form of wages or profits from capital, which is the most unequally distributed and which inevitably changes (up and down) due to the intervention of the government. State. In average terms of all Spanish households, extended family income (that from production plus severance pay and pension fund income) stood at 34,087 euros in 2019/20. When pensions, unemployment and sickness, and family assistance programs are added, it rose to 45,211 euros which, discounting the taxes paid, is reflected in a disposable family income of 29,283 euros/family. Finally, if benefits in kind are added to it, such as health (4,544 euros) and education (2,531 euros), the average extended disposable income per household in Spain rose to 36,258 euros.
Regarding its distribution, Fedea concludes that 80% of households receive more than what they contribute, although this decreases with income level: the poorest 20% increase their gross income by 96%; the next 20%, 52%; to the subsequent 20%, the intervention of the State raises it by 28%; and, finally, the remaining 20% practically remains in balance between payments and income; From that 80%, the rest of the families present a negative and growing balance: with a maximum contribution of 28% for the richest 1%.
Logically, if public intervention raises the income of those who have less and reduces it for those who earn more, inequality is reduced. And this is a relevant final conclusion: a society that wants to reduce inequality, and ours believes that it is excessive, must pay more taxes and increase public benefits. Because, one and the other, they go through neighborhoods.
