The decision to keep the income tax brackets unadjusted for inflation generated an increase of over 12 million euros in tax collection in Lleida during the last fiscal year.
This phenomenon, called cold progressivity, occurs when tax brackets do not adapt to the increase in the cost of living. Taxpayers see their nominal salaries rise due to inflation but are taxed in higher brackets without having increased their real purchasing power.
The Lerida tax office marks historical records
The Tax Agency increased its revenue in the demarcation by 14.9% to reach the record figure of 1,654 million euros. The Personal Income Tax accounts for the largest part of this collection with more than 762 million euros.
VAT registered an increase of 19.7% compared to the previous year and contributed 529.74 million to the public coffers. This second source of income for the treasury in the province reflects the direct impact of prices on the tax base.
A hidden increase for middle incomes
Since 2022, inflation has accumulated an increase of close to 15%. This dynamic causes citizens to lose purchasing power while automatically paying more taxes.
"Not deflating the tax bases benefits those who earn the most in absolute terms" - Treasury and the Generalitat
Both the central Government and the Generalitat have rejected updating the IRPF tariffs. They argue that this measure would mainly benefit recipients of higher incomes. Various political parties and social sectors denounce that this inaction is equivalent to a hidden tax increase that particularly punishes the middle classes.
The State collects billions extra
The Annual Progress Report submitted by the Ministry of Economy to the European Commission quantifies the state impact of this measure. The non-updating of the IRPF brackets has meant an additional income of 1,137 million for the State and 1,157 million for the autonomous communities.
The total collection amounts to 2.3 billion nationwide according to official data sent to Brussels. This increase already represents more than 0.1% of Spanish Gross Domestic Product.
The Executive has also modified specific taxes such as the temporary solidarity tax on large fortunes. These measures have generated an additional 6.2 billion euros for the treasury.
Thanks to the combination of new taxes and the lack of IRPF deflation, the Government collects the equivalent of 0.39% of GDP. This figure complies with the medium-term structural fiscal plan agreed with the European Commission at the end of 2024.
Taxpayers from Lleida now bear a greater tax burden without their real wages having improved. The gap between what they earn and what they can buy widens while public coffers accumulate historic surpluses.