As well documented by White Paper for Tax Reform exists among the Spanish population the perception of a growing inequality and the need to make our tax system more redistributive. This is so even though the data does not exactly diagnose this. Despite the crises experienced, inequality in final disposable income, which is what public spending and current taxes have had an impact on, shows practically stable, thanks precisely to social benefits. Much information about growing inequality is punctual, although shameful (the direct and indirect remuneration of some managers is scandalous), but it is the narrative of other countries, and of the United States in particular, that has inspired the most international economic literature (Piketty and others), more than, fortunately, our statistics. But the perception is there and with it the claim in favor of a more redistributive tax system.
A look at reality shows us that targeting tax reform towards greater redistribution is not easy Nor does he have a clear path in the business world. In Spain, considering the collection, we know that the quotes (a proportional payroll tax levied on occupation) they are more important than the two taxes together on income (personal and corporate). Of these, the one that affects natural persons taxes more on earned income than those of capital, so that this taxation cannot end up being very progressive. It is not that the governments of all kinds of countries have gone crazy with the right-wing discourse: it is that capital, on the other hand, relocates at the click of a button. As to taxes on consumption, VAT, excise and all the environmental imposition that awaits us, irremediably is and will be regressivesince the poor pay more indirect taxes in proportion to their income than the rich.
If we want, then, to fight to reduce inequality, always a socially desirable objective, we have to do it through other means, beyond taxation. In any case, a good tax system adjusted to the evolution of the economy, to ensure everyone’s compliance. First, the system has to collect efficiently and sufficiently to cover social spending. Second, actions in the field of public policy depend on what inequality we focus. Helping those who are worse off can be done from the phase of entry into the world of work, with more education, job training, good active employment policies, assistance (health, reinsertion income); in the productive sphere, with regulation of minimum wages and labor guarantees, and finally complement the aid strategy for lower income groups with social income transfers, correcting everything that could not be corrected in the previous phases. Very little, then, manipulating taxes. If we are concerned about inequality due to the worrisome disappearance of the middle classes, reasonable actions are ‘preproduction’ and they would start with one better quality of higher education, which in the market phase favors the creation of qualified work, as well as more ‘agreed’ labor relations and shared capital under cooperative forms. And only as a complement or safeguards, to have ultimate safety nets for basic guarantees. Finally, if the growing weight of the richest, increasingly polarized, is of concern, what can be focused on in the previous phases of production is the inheritance Tax, in the role of better matching the entrants in the race of life, to make a most meritocratic society that legitimizes the achievements of each one; in the market phase, it is anti-abuse regulations, monopolistic domination and political advantage that tend to favor the most privileged classes. And at the end, according to the previous results, of the rents coming out of the market, the wealth tax.
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Note that almost all the actions required are on the side of spending, regulation and two taxes that in some countries are being questioned. A wake-up call between objectives and instruments of public policy so that enthusiasm does not make you lose the sense of reality.