Evolution of Spanish tax policy (1975-2021)

Abstract

The article considers the evolution of the Spanish tax system during the most important period of its historical development: the transition from Francoism to democracy. As the main economic function of the state, the tax system traditionally reflects its social structure, the nature of economic relations and managerial decisions of the ruling class, fundamental processes of social development. Unlike most European countries, the tax policy of the Spanish state until the last quarter of the 20th century was characterised by extreme anachronism, due to the long existence of Franco’s political system. Spain entered the path of democracy and europeanization of the Franco tax legislation only in the second half of the 70s, having gone through two stages of its modification: from state dirigism to neoliberal model. The main goal of the first stage was declared to achieve a fairer redistribution of the tax burden and narrowing the gap in the level of taxation between the most and the poorest strata of the population in accordance with the democratic principle "who receives the most income pays more to the budget". In the course of the second stage of tax reform the emphasis was done on stimulating business, its innovative, foreign economic and competitive potential, curtailing the functions of the Welfare state. Pandemic Covid-19 sums up the negative consequences of the neoliberal policy, largely due to the existing tax model. Its serious modification is the main direction in the complex of socioeconomic reforms of the Spanish government for the coming years.