The fiscal policy of the Government of Pedro Sánchez, with María Jesús Montero as Minister of Finance, has imposed a historic tax burden on companies and citizens, both in volume and impact. Since its arrival at La Moncloa, the Executive has approved almost 100 increases in taxes, fees and contributions, which have generated unprecedented fiscal and labor overcosts.
"Spain has increased its tax burden by 1,9 percentage points of GDP since 2019, while 14 EU countries have reduced theirs.", denounces the Juan de Mariana Institute in its report “Taxometer 2025”. While the European average has reduced its tax burden by 0,9 points, Spain has stood out with a model that weakens business competitiveness and squeezes the middle class.
An average salary pays 55% in taxes and contributions
According to the study, The tax burden of the Spanish middle class now reaches 54,7% of their full salary., that is, more than half of what it costs to hire a worker goes to taxes, contributions and indirect taxes. In total, they are 21.607 euros per year per average taxpayer, considering personal income tax, VAT, contributions paid by the employee and employer, municipal taxes and the impact of the public deficit.
"For an employee to spend 100 euros, their company must spend 191 euros in total labor costs.", the report notes. This overtax, compounded by inflation and the lack of deflation of personal income tax, has set off alarm bells for both families and the productive sector.
Companies have no room to confront the trade war
The recent tariff war launched by the US comes at a critical time for Spanish companies. “It rains on the wet”, Summary from employers' associations. Adding to the international uncertainty is the fiscal burden accumulated in recent years.
The Government has imposed a "tangle of taxes, contributions and unforeseen costs" which puts national companies at a clear disadvantage compared to their European competitors. According to data compiled by the Juan de Mariana Institute, Tax and contribution increases already exceed 94, and could reach one hundred before 2025 if the Government completes its term.
Furthermore, the government's attempts to present support plans have been described as "insufficient and watered-down." The announced injection of 14.000 billion euros to address the trade conflict includes 7.400 billion in ICO loans (which must be repaid) and 5.000 billion in Next Generation funds that were already allocated and unused..
A 23.000 billion hit due to the reduction of working hours
Added to this situation is a new fiscal and operational threat: the Reduction of the working day promoted by Minister Yolanda DíazAccording to the CEOE, this measure would have a cost of 23.000 billion euros for companies, due to the increase in labor costs without a parallel increase in productivity.
"It is irresponsible to approve this reform without addressing the problems of productivity and absenteeism.", have been criticized by business organizations. Cepyme, for its part, estimates that In non-worked but paid hours alone, the impact would be 11.800 billion., and the lost gross added value would reach 30.600 billion.
The blow will directly affect key sectors such as distribution and tourism, which are already suffering the effects of the new US tariffs. The employers' association Anged, which includes El Corte Inglés and Carrefour, estimates a cost overruns of 461 million euros and a loss of 24,2 million working hours if the reform goes ahead.
3.079 euros more per household: the Sánchez-era bill
Since 2018, the increase in tax pressure in Spain has meant, according to calculations by the Juan de Mariana Institute, an additional burden of 3.079 euros per household, adjusting the data for the CPI. In individual terms, each citizen has had to bear an additional real tax burden of 1.223 euros.
This increase has occurred without significant improvements in public services or a proportional increase in purchasing power. On the contrary, The rise in prices and the lack of updating of personal income tax have led to a loss of consumption capacity, especially in low- and middle-income households.
The middle class pays more… and receives less
The analysis of the personal income tax confirms that The 5,2% of taxpayers who earn more than 60.000 euros contribute 41,7% of all tax revenue.While The 56% who earn less than 21.000 euros only contribute 8%..
Far from the official story, this shows that the tax burden is already highly progressive and that the middle and upper classes are those who contribute the most to sustaining the system with the taxes they pay.
"It makes no sense to claim that those who earn the most contribute the least," The report points out that it questions the government's intention to raise taxes even further in order to "harmonize" with Europe.
This tax harmonization, he warns, This would involve an increase in revenue of 44.940 billion, that is, 2.747 euros more per household., in a country with twice the unemployment rate of the EU average and lower per capita income.
