La increase in personal income tax In Spain, the 2024 fiscal year has marked a turning point in the tax burden on millions of workers. Under the leadership of María Jesús Montero, Minister of Finance, and with the direct support of the president Pedro Sánchez, the Executive has increased the collection of this tax to levels never seen before: more than 129.000 million euros, which represents 43,9% of the total income of the Tax Agency.
This record is not a coincidence nor the result of a better economy., as the government tries to justify. It is the direct consequence of a fiscal strategy designed to increase revenue at the expense of those who contribute the most, while hiding the real increase behind technical terms and hidden decisions. La increase in personal income tax, far from being punctual or justified, has been planned carefully, through the systematic refusal to deflate the tax rate as prices rose.
A historic increase, without debate or social justification
The average personal income tax rate has gone from 12,9% in 2019 to 14,4% in 2024, the highest percentage ever recorded. And the most alarming thing is that this increase in personal income tax It has occurred without the need to approve any legal reform in Congress. The Government has opted for a formula that avoids democratic debate: not updating tax brackets in line with increases in inflation and wages.
In practice, millions of workers have had to pay more taxes without having improved their standard of living., paying more income tax for receiving a salary that barely compensates for the loss of purchasing power. This strategy, condemned even by the Bank of Spain, has been described as a “silent tax increase” by numerous economists.
Personal income tax, which has become the "crown jewel" of the tax cuts
La increase in personal income tax has been the basis of a total collection close to half a billion euros, the largest tax burden in Spain's history. Meanwhile, VAT contributed 30,7% of revenue and corporate tax 13,3%. The remainder comes from excise taxes such as tobacco and alcohol.
But it is the IRPF, the tax that directly affects workers, the one that supports 44% of the State's tax collection effortsWhere is the executive branch's commitment to "not raise taxes on the middle class"? The numbers speak for themselves: The increase in personal income tax has been a real tax blow for millions of Spaniards..
A punishment concentrated on those who contribute the most
Far from being an equitable measure, the current structure of personal income tax shows that 25% of taxpayers contribute 70% of all revenue. The increase in personal income tax It has hit middle and high incomes particularly hard, as they already bore the brunt of the tax burden.
The result is a deeply unfair system, which penalizes work and productivity, and discourages entrepreneurship. All this while the Government maintains a discourse of defending public services that does not translate into real improvements for citizens, but rather in an increasingly expensive and less efficient administration.
Inflation + increase in personal income tax = loss of purchasing power
The binomial inflation plus increase in personal income tax It has been lethal for Spanish households. Over the past five years, prices have risen steadily, and although wages have tried to compensate, The Government has decided to base its tax collection strategy on these increases., forcing millions of citizens to pay taxes as if they were richer, when in reality have less economic capacity.
Independent organizations have warned that this formula is unsustainable in the long term. The Bank of Spain has already estimated that more than 50% of the increase in personal income tax revenue between 2019 and 2023 is due to this indirect increase., caused by the lack of deflation.
Sánchez and Montero: from "not raising taxes" to fiscal robbery
La increase in personal income tax It openly contradicts the promises of Pedro Sánchez and María Jesús Montero. Both leaders stated during the last term that would not increase the tax burden on the working middle classHowever, official data show that they have turned the IRPF into the pillar of an aggressive fundraising strategy, designed to finance its public spending model without cuts or structural reforms.
Citizen confidence in the government's fiscal policy is at an all-time low.While families struggle to make ends meet, young people are finding it increasingly difficult to become independent, and businesses are finding it increasingly difficult to maintain employment.
