The Independent Authority for Fiscal Responsibility (AIReF) has alerted this Tuesday that the aging of the population and the growing proportion of pensioners It will not only mean an increase in public spending on pensions and care, but it will also cause a reduction in government revenue due to the lower collection of taxes.
“Aging can determine changes in the collection capacity of the economy. It is clear that aging alters the composition of income (it affects the ratio between wages and pensions), the composition of wealth (older population accumulates more assets) and also affects consumption patterns. Conceptually, they tend to predominate Negative effects of aging on the collection capacity”; he has admitted Christina Herreropresident of this institution, during the inauguration of the Ageingnomics forum organized by the Mapfre Foundation.
In particular, the president of the Tax Authority explained that demographic aging tends to cause a collection drop for Income Tax (IRPF), since as the population of working age decreases, the participation of workers also decreases. wages in national income. “There is a lower contribution from the progressivity of the income tax since older taxpayers generally bear lower effective tax rates”, as their pension is lower than the salary they received when they were active.
This fall in the population of working age translates into lower income for Social Security due to social contributionswhich also reduces the income of the system.
Herrero has pointed out, however, that there are two effects in the opposite direction that can alleviate the drop in personal income tax income: one, that having fewer workers can raise wages, which implies more collection; and two, that the Tax Agency can raise More For Wealth, “By taxing the income from the greatest assets of older individuals, it can increase the collection, although it should be taken into account that this type of income is subject to lower rates than income from work.”