In the 1970s Spain was a country with a very small tax pressure with a really low international debt and public expenditure. We had a very affordable public administration: a Central Administration plus the municipalities. In 1975 the public sector accounted for some 24% of the GDP and we had no deficit; now we are in some 50% of the total Domestic Product being spent by the public sector (if not more) and a deficit rocketing up fast.
But of course, our fixation with being like, becoming same as, and imitating other European countries led us to this situation.
We have a mayor in Madrid, Alberto Ruíz Gallardón, with around 1000 advisors!! He is known as the pharaoh, always up to spend our money in some really expensive infrastructure.
We have 17 Autonomous Communities (regions) with their correspondent parliaments, ministries, and in some cases a parallel police. The regional expenditure has grown sharp since the 1980´s and doesn´t seem to slow its frantic path towards bankruptcy except for some regional administrations such as Madrid. On top of these parvenu crazy vagaries we have to stand the rounds for some Orwellian ministries such as the Ministry of Equality.
In this context EU Commissioner Joaquín Almunia (he was the Socialist Party candidate to the Presidency in Spain in 2000 and was completely defeated by José María Aznar) has declared during an interview "Of course taxes must be raised in those countries where deficit is high"
No words about cutting expenses in some oversized administrations, no word about fostering investment by reducing fiscal pressure on small and medium sized companies. The word is always more: more deficit, then more taxes. More nationalistic demands from separatist parties in Spain, more money to appease their "nationalist" concerns.
Meanwhile there are people in Spain, like Mr. José Blanco (minister of infrastructures) who says that to sustain the welfare society we must...Yes, pay more taxes.
But we are so "lucky" to pay for these smart guys in Brussels and all their assistants, chauffeurs, and red tape maniacs orbiting around them. That "handy" Strasbourg Parliament with "only" 736 members that barely can subsist with their average yearly salary of some 85.000 euros.
Let´s have a look at this chart:
We can see (sorry about the blury picture) that the income tax as per GDP per capita that Spain has is 37,2% for an average income of 31.774 USD, a higher tax rate than Luxembourg (with an average income of 105.000USD), Ireland (51.000USD), the US (46.400), Germany, Japan, Canada and the UK (all OCDE members and all with higher income per capita than Spain). So all those richer countries, in terms of GDP per capita, have lower income tax levels, do not please compare us to them Mr. Almunia.
Anoter fact: We have a similar Income tax percentage (as per GDP per capita) than The Netherlands and Dutch citizens have 50% more income per capita(47.000 vs 31.000). ¿Are you there Mr. Almunia? We would be more than happy to pay 40 or 45% if our income was similar to that of Dutch citizens.
And even the silliest among human kind would prefer to pay 60% in taxes if given an income of 100.000 than to pay 25% given an income of 30.000USD.
But everytime a socialist government runs this country we end up owing more and paying more, and of course expending a lot more...But no one wants to talk about cuts.
There is a joke going around that says:
"Crisis is when your neighbour loses his job, recession is when you lose your job and recovery is when Zapatero loses his job" And some of us can´t honestly wait any longer!! Please, please Almunia, save us no more!
And finally one last thought and question:
Why do our governments always compare us to those countries with higher percentage of taxes?
Why do not compare us to those countries with higher GDP per inhabitant and lower income tax percentage? If the rest of the European countries would do the same (and I know some do) then this would become a race to increase fiscal confiscation in order not to be the one at the back of the list.
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