Pedro Sánchez, the rich and the poor

In the 1970s, American television broadcast the series Rich Man, Poor Man.

Thomas Osborne
Thomas Osborne
27 October 2022 Thursday 21:45
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Pedro Sánchez, the rich and the poor

In the 1970s, American television broadcast the series Rich Man, Poor Man. It was a success. It was the story of a German émigré family and their two sons, Rudolf and Thomas. The first strives and succeeds, and the second is a loose bullet, but he is the good one, because he has a better heart. Its popularity was based on a Manichean and simple plot with which the majority of the population could identify.

It is a story similar to the one used by Pedro Sánchez to try to turn the polls around and ensure his re-election. For this he is using next year's state budget as a sounding board for political marketing. A kind of national-populism with social insertion in which the leader steals from the rich to give to the poor, like modern Curro Jiménez.

80% of the population, according to CIS surveys, is in favor of the government's economic and fiscal policy. Raise taxes on the rich to lower them on the poor. The problem is that the vast majority of the Spanish population is neither rich nor poor. She is from the "working middle class", as Sánchez himself calls it, and most of the Treasury's collection falls on her. Poor families hardly pay taxes because they have no money. While the rich are very few and are so well advised that they contribute a small part of the whole. Where the bulk of the collection is obtained is from that strip that "does not belong to anyone", in the words of a socialist leader.

The logic is simple. The middle class aspires to be rich and works harder and harder to get it. Therefore, the more taxes they put on them, the more they work to continue improving their status. If the fiscal policy designed by Minister María Jesús Montero is reviewed, it is verified that the reduction of taxes for the poor barely represents a small portion of the excess collection that is being achieved thanks to inflation. The tax hike on the rich is also symbolic. The trick is that by not deflating taxes, it is causing a rise in cold tax pressure that affects the entire population equally.

When food and beverages skyrocket, so does VAT collection. The rise in indirect taxes is the same for everyone, although it does the most damage to those who have the least, because they are tighter. And the same thing happens with salaries, to the extent that they rise so as not to lose purchasing power, they change the scale in personal income tax and pay more taxes. Treasury returns to stay with a good pinch.

But where this shell game is even bloodier is in pensions. What José Luis Escrivá gives with one hand, Montero keeps with the other. The maximum pensions, around 40,000 euros gross per year, will rise 8.5%, like the rest of the benefits, so that they do not lose purchasing power. That is, about 3,500 euros per year gross. So they will pass the IRPF section and the rise will remain in borage water. And this provided that the sections are not retouched, as the Treasury proposes to increase collection.

One might wonder if someone with a gross pension of 40,000 euros is rich. If you compare him with those who have the minimum pension, probably yes, but it is not said that the one who earns more is the one who has contributed more and longer. But if, as some argue, the lowest pensions continue to rise and the highest ones run into each other, there will come a time when it will not be worth paying for the highest base.