The General Council of Economists proposes adjusting personal income tax to salary increases: a low salary would save €250 and a top executive, €2,100

BarcelonaThe General Council of Economists, the body that groups the colleges of economists of the State, proposes that the Spanish government adjust its income tax bracket (IRPF) to the salary increases of recent years. According to the entity's calculations, a Catalan worker with a gross annual salary of 25,000 euros would save about 252 euros annually, while for higher salaries, such as 400,000 euros, the savings would exceed 2,100 euros annually.

Specifically, the General Council requests that it be "deflated" – that is, that the percentages of the different tax brackets be updated – in accordance with the average salary increases recorded in collective agreements in Spain between 2022 and 2026. Thus, the salaries of workers with employment contracts covered by agreements have increased by 18.1% in this period, according to data from the Ministry of Labor, unlike the cost of living, which grew by 15.8% in the same period.

The IRPF has two brackets. Half of the tax is income for the State according to a scale, and the other half, for the autonomous community where the taxpayer resides, with the addition that each territory has its own different scale. Some regional governments have already been applying deflations, but always according to inflation. The Ministry of Finance, on the other hand, has never proposed it – nor has the Generalitat – and the General Council requests that it be applied.

The argument in favor of adjusting for salaries is that the salary increases of recent years have allowed workers to recover, at least partially, the purchasing power lost due to price increases recorded from 2022 onwards, when inflation soared globally due to the Russian invasion of Ukraine and the reactivation of the economy after the pandemic, which caused tensions in supply chains and industry.

The fact that workers earn more means they also pay more IRPE (Personal Income Tax), but in reality these salary increases have only served to recover lost purchasing power, which is why, in reality, keeping the tax unchanged represents a real-terms tax increase. "If the tax rate is not adjusted to this generalized increase in salaries, it can happen and will happen that workers will start to pay taxes in higher brackets, when in reality their economic capacity has not increased," explained Raquel Jurado, technician at the General Council of Economists, at the presentation of the study Panorama of regional and foral taxation 2026.

However, the other side of this proposal is what savings this adjustment of IRPE to salaries represents for workers. The reason why the Spanish government and the Generalitat have not applied any adjustment of this type is that the savings primarily benefit higher incomes.

Thus, according to the entity's proposal, in the case of Catalonia, a worker earning 25,000 euros gross per year would go from paying 3,531.38 euros per year to 3,279.06 euros. That is, they would save 252.31 euros per year in IRPE. However, at the other extreme, for a worker with an annual salary of 400,000 euros per year (for example, a professional footballer or a senior executive of a multinational company), the savings would be 2,150.72 euros per year, as they would go from paying 176,795.44 euros to 174,644.72 euros in IRPE.

In other words, the savings for higher incomes are 8.5 times greater than for an income of 25,000 euros. It should also be taken into account that 49% of Catalan workers earn 25,000 euros per year or less, while a gross salary of 400,000 euros is among the top 1% in the country.

In the case of gross incomes of 30,000 euros, the savings from deflation would be 347.29 euros per year, while for salaries of 40,000 and 70,000 euros, the reduction in personal income tax would be 527.39 and 758.87 euros, respectively.

Reform of the regional financing system

In the presentation of the report, the president of the General Council of Economists, Miguel Ángel Vázquez Taín, has called for a reform of the regional financing system. According to the economist, "the normative frenzy of the autonomous communities on ceded taxes generates inequalities among citizens according to their place of residence," he assured.

In this regard, the study analyzes the impact of the different taxes managed by the regional administrations. In the case of Catalonia, the regional segment of personal income tax (IRPF) is among the highest in the State, which means that Catalans with salaries below 45,000 euros are the ones who pay the most. For higher incomes, the Valencian Community is where the income tax is highest. This pattern is reproduced in the wealth tax –Catalonia is where fortunes below 4 million euros pay the most, while the Valencian government maintains higher rates for higher ones– and in that of documented legal acts.

Likewise, in the case of the inheritance and gift tax, Catalonia is among the four autonomous communities where it is highest, but it mainly affects larger inheritances. Although Jurado has admitted that "the majority of the population will not inherit such substantial inheritances," the Council's study analyzes an inheritance between father and son valued at 800,000 euros (200,000 of which corresponds to the deceased's home): "If we were to take a lower amount, there would be no significant differences between autonomous communities," he indicated.