2024-01-09 16:57:00
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The photo of the Spanish economy in 2023 is the image of the impoverishment and of plunder. The state is once again profiting from inflation with a government that refuses to deflate taxes by increasing prices, and triggers personal income tax collection even if the amount to be collected is reduced.
The Minister of Finance has been outraged by Feijóo’s demand to alleviate the tax burden on citizens and has responded that personal income tax collection is increasing because there are more people working than ever. What she does not say is that of the 20.8 million affiliates in December, 800,000 have multiple jobs, as the Secretary of State himself recognizes, and there are 3.5 million public employees paid with greater public debt, a new record. There were 19.9 million members in 2019 and public employment has increased by 320,000, drawing on more debt, while moonlighting has increased by 120,000. Not only is it not true that there is a record of employment, but the INE’s own figures for hours worked per affiliate according to National Accounting are below 2019 and 2008. In the third quarter they were 8,635,334.2 for 21.19 million of employed people, in the same quarter of 2019 8,518,326.1 for 20.35 million and in the equivalent of 2008 9,015,328.5 for 21.13 million employed people.
Collection has skyrocketed because they have reduced taxes on all workers, raising the minimum contribution bases hidden in the increase in the SMI, raising taxes on labor and, in addition, profiting from inflation.
The unemployment and affiliation figures reflect this poor performance. There are more than 3.2 million unemployed registered with the SEPE and 11,000 ERTE, with an effective unemployment figure, according to Fedea, that has not improved significantly since December 2019. In the affiliation figure we find a figure inflated by an increase of more than 320,000 public employees paid with debt and 800,000 “affiliates” who are actually moonlighting. Fedea also certifies that the empirical temporality has not decreased, only the contractual one, which means that they have changed the name and little else. Precariousness, the duration of contracts and their survival have not improved since the labor reform.
The impoverishment of the Spanish is twofold. On the one hand, annual inflation is 3.1% according to CPI, which is higher than the eurozone average (2.9%). If we also adjust for a lower income than the average, the difference is much worse, and it is not surprising that we lose places in per capita income adjusted for purchasing power, placing Spain 15 points behind the EU average when it was nine in 2018. We cannot forget that the accumulated inflation since Sánchez governs is 16.3% according to the INE, which represents – adjusted for the income of Spaniards – a loss greater than the average of our comparable countries. Indeed, an inflation of 20% with German salaries is not the same as an inflation of 16.3% with Spanish salaries. For this reason, and for the brutal increase in taxes on everyone, directly and indirectly, Spain has the worst per capita income data compared to the eurozone since the 90s.
Due to the brutal increase in taxes on everyone, directly and indirectly, Spain has the worst per capita income data compared to the eurozone since the 90s.
It is honestly hilarious to read that Spain is growing more than its surrounding countries when Sánchez signs in 2023 the third worst recovery in the European Union since 2019 levels. The slowdown is such that in the first quarter the government boasted of growth year-on-year of 4% and the fourth is the medal of a year-on-year rebound of 1.8%. With business turnover falling by 4.8% in 2023 until October, according to the INE, and a brutal drop in household income. Real per capita household income is 0.7% below that of 2007 in Spain, the third worst country in the OECD. The impoverishment compared to the OECD is simply intolerable. In Spain it is 0.7% below 2007 levels and in the OECD it has grown by 22.1% since then.
All this with an increase in debt of more than 325,000 million euros, total liabilities of public administrations that exceed two trillion euros, and a debt according to the excessive deficit protocol that is more than 1.57 trillion, growing more than 4% so far this year. That is to say, Spain becomes poorer and does not grow, it goes into debt.
2024 is going to be a repetition of 2023, greater fiscal plunder and more absolute and relative deterioration.
The author of this column is Daniel Lacalle.
#Sánchez #money #inflation #impoverishes