Taxes on large fortunes generate 60 cents of every ten euros collected by the treasury in the European Union, while taxes on consumption and income, which affect the average citizen to a greater extent, represent eight out of every ten euros that reach the public coffers, according to an analysis by the NGO Oxfam.
Specifically, In 2022, wealth taxes accounted for 5.8% of tax revenue in the community bloc and those applied to capital gains, including corporate tax, 16.2% of the same.
Meanwhile, taxes on labour, particularly income tax, accounted for more than half of the total revenue collected by the treasury (50.6%) and consumption taxes, such as VAT, 27.3%, according to the Oxfam study, which uses data from Eurostat and the European Commission.
“Taxes that disproportionately affect ordinary Europeans – to consumption and work – generate 13 times more revenue than wealth taxes“which are paid for mainly by the super-rich,” the organisation said in a statement.
In Spain, the distribution is similar: 50.6% of revenue comes from taxes on work, 25.77% from consumption taxes, 14.9% from capital income tax and 8.72% from wealth taxes.
Although the super-rich also pay income and consumption taxes, these hit the poorest Europeans the hardest, as they take a proportionally larger share of their income: unlike the wealthiest, they have fewer sources of income other than work and spend a larger part of it on buying essential goods and services, such as food.
Oxfam reminds that In 2022, the richest 1% owned a quarter of all personal wealth in the EU and the ultra-rich (about 3,650 people representing 0.001% of the population) increased their wealth by 237%, and stresses that while taxes on this group have been reduced in recent years, those that affect the average European the most have risen.
Between 2000 and 2023, the average tax rate applied in the EU to the highest incomes fell from 44.8% to 37.9%, and that applied to the largest companies fell from 32.1% to 21.2%.
However, between 2010 and 2022, the average rate of income tax on labor rose from 33.3% to 34.8%, and the average rate of consumption tax rose from 17.7% to 18.7%, according to the organization.
“The ultra-rich accumulate more than they can spend” while they avoid taxes and the rest of us bear the brunt of the tax burden as we try to make ends meet. A European wealth tax is not only urgent, it is fair,” said Oxfam EU tax expert Chiara Putaturo in a statement..
The organisation estimates that a wealth tax of up to 5% on EU multimillionaires and billionaires would raise 286.5 billion euros a year and is promoting a European citizens’ initiative calling on the Community Executive to act in this direction, for which a million signatures are needed, of which 300,000 have so far been collected.
In this regard, Putaturo welcomed the fact that there is a “growing consensus” in international politics and among citizens on the need to tax the “super-rich.”
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