The Fallacy of Low Taxes in Spain, published at IREF
I’ve published an article on the English website of Institute for Research in Economic and Fiscal Issues (IREF). It is a kind of summary of the lengthy report on taxation we’ve published at the Instituto Juan de Mariana called La falacia de los impuestos bajos en España: Estudio comparado de fiscalidad.
The current Socialist (PSOE) government has claimed in different occasions that the low fiscal pressure (measured as the tax-to-GDP ratio) that Spain has experienced in 2008 and 2009, gives policy-makers a large leeway to raise taxes. Besides, this measure has been supported as necessary in order to maintain –or improve- the current government-run social safety net and the level of public infrastructures. It has also been presented as a means towards approaching our European neighbors in terms of welfare benefits.
But does this justify increasing the tax burden on Spanish citizens? Let’s see why this does not make much sense.