Abstract:

The redistributive capacity of the Spanish tax and transfer system is among the lowest in the European Union (EU-28), with a reduction of 0.194 in the Gini index, while the European average is 0.209 points. This places Spain in sixteenth position among the 28 states of the European Union.

In the case of income replacement benefits (unemployment, retirement, survivors’, sickness and disability), the redistributive effect is greater than the EU average: Spain ranks ninth. However, in terms of minimum guarantee benefits (family, social exclusion, education and housing), Spain is well below the EU-28 average, ranking last.

Particularly serious problems are detected in social security contributions, which worsen income distribution, and in the policy against social exclusion. Therefore, two simulations are used to analyse possible changes in social security contributions and minimum income guarantee benefits.

For social security contributions, the proposal is inspired by the Belgian system, and for minimum incomes, the proposal is to achieve an effective application of the existing regulation, ensuring 100% of minimum income to all people who would be entitled to receive it.

Reference:

Fuenmayor, A.; Granell, R.; Savall, T. (2020): “Los efectos redistributivos del sistema de impuestos y transferencias en Europa”. Observatorio social de la Fundación “La Caixa”.