IRPF Hike by 3 Points and €200 for Self-Employed: The Adjustment That Won't Balance

IRPF and Self-Employment Fees: Collecting More Without Touching Spending

Raising the IRPF by three percentage points and the minimum self-employment fee to €200 does not fix public accounts. Not by a long shot. The measure is sold as a lifeline for the pension system, but it rests on an assumption that almost no one discusses aloud: that spending remains exactly where it is. In practice, the adjustment only tightens the screw on the revenue side.

Who Pays the Three Points and the €200

The first blow is taken by the middle and high-income wage earner, who already supports most of the IRPF revenue. The second is the self-employed individual, whose minimum fee would rise to €200 per month: an amount that, in a bad scenario, is paid the same whether or not there is turnover. From there, the escalation loses its brakes. Some propose setting the self-employed floor at €500; others advocate for 70% IRPF to protect pensions, while some directly propose 85%.

The Warning Contained in the Proposal Itself

This is where the contradiction that no fiscal design resolves emerges: raising the IRPF does not guarantee increased revenue. An excessive tax rate narrows the base, discourages activity, and can end up collapsing the treasury, meaning the remedy worsens the illness. And the margin runs out quickly: with this increase, the treasury would stop losing money after about six months. Before the measure proves anything, the accounting relief has already been consumed.

What Is Left Out of the Calculation

The uncomfortable question is not how much to raise, but why the reduction in superfluous spending does not appear in any proposal. Duplicated administrative structure, intermediary bodies, organizations with full boards and their own advisors: all of this is taken for granted, as if it were a physical law. Parallel to this, there is discussion about whether VAT would be the most profitable instrument in a high inflation scenario because it taxes consumption without waiting for the annual declaration.

With these considerations, it is likely that the increase will be approved and collected, but it will not solve the underlying problem: the treasury that is currently unbalanced will remain so within two fiscal years. Probable, not certain. Spanish fiscal history also holds examples of adjustments that worked precisely when no one expected them to.