Why do I have to pay taxes?

18/03/2014 | Alfonso Martínez Solís (Alumno UC)

When we purchase a product, we pay for this product with a certain amount of money, but if we look carefully at the price tag, we see that the product´s price includes a percentage of VAT. 10 years ago was 16% of the product´s price, after that it was 18% and now is 21% so when consumers pay for a product they don´t just pay the value of the product, they also have to pay a tax.

Another example of a tax is the income tax, which is a tax applied to the salary which a worker earns in one year in Spain.

Since 2008 taxes have increased in our country a lot and salaries have been decreasing.

Society doesn´t understand why the government makes these types of decisions because with the money they earn working, they purchase each year less and less. If to this situation we include those taxes increases, people only can afford to buy staples such as food, clothes, etc. And if we take into account the other problem which is in fact that the main problem in our country is the high level of unemployment (26% of the population in unemployed), we can see that increasing of taxes is a dramatic situation for these people because they can´t afford either to buy food or pay their mortgage and sometimes they have children so they situation is very difficult.

From an economic point of view, taxes have a double impact:
On the one hand, taxes are an important source of income for the government; it uses this money for different means like, for example, to guarantee the welfare state, investing in education or health services, or reducing the government´s deficit. Nowadays, due to the Spanish economic situation, the government has decided to reduce the investment in these areas so they use the vast majority of the money collected to reduce the national debt.

On the other hand, taxes directly affect the consumption of goods and services, so if taxes increase, the products are more expensive and the consumers buy fewer products.

Finally, the government must find equilibrium when they determine different taxes in order to get enough money to make its investments, pay its debts, and avoid decreases in consumers´ purchasing power too, because there is a direct relation between the money collected and consumption so if consumers consume less, the government will collect less money from taxes.

Nota: Este artículo ha sido elaborado por Alfonso Martínez Solís, alumno de la Universidad de Cantabria, como una de las actividades enmarcadas dentro del programa de capacitación lingüística, dando su permiso para la publicación del mismo en FxM Noticias/OIE24 News.