Abstract

The Spanish tax system currently includes two taxes on the net wealth of individuals: the traditional Net Wealth tax, transferred to the autonomous communities, and the new Solidarity Tax on Large Fortunes, a state-level tax introduced at the end of 2022. This paper proposes three reforms aimed at integrating wealth taxation into the personal income tax, with the objective of simplifying the tax system and ensuring effective taxation of large fortunes. Using data from the 2021 Household Panel and microsimulation techniques, the revenue and redistributive impacts of these reforms are estimated. The estimation of the proposed reforms shows a considerable increase in public revenue and an improvement in the redistribution and progressivity of personal income tax, as it has a greater effect on high-net-worth individuals.

Reference 

Amo Cifuentes, R., Granell Pérez, R., & Fuenmayor Fernández, A. (2025). Integration of Wealth Taxation into Personal Income Tax: Evaluation of Reform Proposals in Spain. Hacienda Pública Española / Review of Public Economics 255-(4/2025): 29-55. DOI: https://dx.doi.org/10.7866/HPE-RPE.25.4.2