The redistributive effects of special taxes

Report

The redistributive effects of special taxes

José M. Labeaga, UNED;

The general view obtained from the effects of excise duties in Spain (and in Europe) is that they are regressive and their capacity to redistribute income is not clear. The use of these duties has not progressed beyond that of a permanent source of revenue for governments, taking advantage of the limited response of consumers to price changes. Under these circumstances, the question arises of whether it is possible to provide more focus on alternative collection functions and thereby simultaneously contribute to income redistribution. Several possible reforms of these taxes are assessed that can lead to a positive response, especially when it comes to excise duties on electricity and fuels.
Key points
  • 1
       Various goods in all countries of the European Union (EU) are levied with an additional charge to that of VAT in the form of excise duties, which are justified by a regulatory norm because of the existence of negative externalities not included in prices.
  • 2
       The goods subject to these duties are alcoholic beverages, tobacco, hydrocarbons and other energy products.
  • 3
       Excise duties are regulated by Law 38/1992, of December 28, 1992, “because the consumption of goods that are subject to these duties generates social costs that are not taken into account when setting their private prices […]”.
  • 4
       The study has revealed the regressive nature of excise taxes and their use solely to generate revenue for public administrations.
  • 5
       The maximum average rate of excise duties for the period 2006-2017 was paid by the poorest households in 2010 and was equivalent to 8.45% of their income. The richest households in 2010 paid 2.73%, in other words, 3.1 times less in relative terms than the poorest households.
  • 6
       The reforms of excise duties on fuels and electricity that have been considered have helped to demonstrate that they can be used to fulfil not only a dissuasive but also a redistributive function.

Classification

Tags

Subject areas

Contents of the collection

This report is part of the collection

Reports on the Redistributive Economy

made up of the following publications:

The redistributive effects of the system of taxes and transfers in Europe

The redistributive effects of family policies

The redistributive effects of social benefits and taxes: a review of the current situation

The redistributive effects of wealth tax

Related content

Report

The redistributive effects of the system of taxes and transfers in Europe

We analyse possible reforms, considered in a pre-covid-19 scenario, for improving the welfare state in Spain and its redistributive capacity in relation to the European average.

Report

The redistributive effects of social benefits and taxes: a review of the current situation

The situation in the coming months forces us to reflect on our society's (pre-covid-19) redistributive capacity. Spain is one of the EU countries with the greatest income inequality.

Report

The redistributive effects of wealth tax

Does a wealth tax help to reduce inequality when it comes to distributing wealth? This report shows that Spain’s wealth tax displays major shortcomings that limit its collection and redistributive impact.

Report

The redistributive effects of family policies

One of the risks of the pandemic is an increase in child poverty. We analyse the effectiveness of redistributive polices (pre-covid-19) whose aim is to protect vulnerable households with children.

Article

Can algorithms expose tax fraud?

Things are becoming increasingly difficult for tax evaders, with the new big data and artificial intelligence techniques that detect hidden wealth, the abuse of aggressive tax engineering and money laundering.

You may also find interesting

Percentage of people who view themselves as above their parents or grandparents on the social ladder

Infodata

Percentage of people who view themselves as above their parents or grandparents on the social ladder


Social Inclusion

Some 29% of Spaniards have a social position above that of their parents, and over 40% believe they have risen above their grandparents on the social ladder.

Number of generations necessary so that those born in families with low incomes can reach the average level of income in their society

Infodata

Number of generations necessary so that those born in families with low incomes can reach the average level of income in their society


Social Inclusion

In Spain, according to this indicator, it takes four generations to improve the incomes of families with precarious finances.

Fertility rate

Infodata

Fertility rate


Social Inclusion

The fertility rate in Spain is 1.23 children per woman, the second lowest rate among European Union countries.