The rise in inflation In recent times he has greatly reduced the purchasing power of Spanish consumers. Not in vain, The general CPI arrived in the summer of 2022 to touch 11%while that of food reached 16.6% in early 2023, according to data from the National Statistics Institute (INE). In practice, these numbers translate into a important reduction of our personal finances and savings capacity.
The problem increases even more if your salary has raised to compensate for the rise of the CPI but that increase It does not translate into a real increase in purchasing power Because in the end you have to pay more taxes. In summary: the cost of life is triggered, your salary goes up less but you have to pay more because you have risen as a tax section.
To fix this nonsense, there is a Fiscal mechanism that several regional governments have usedsuch as Madrid, Valencia, Castilla y León, Galicia, Murcia or Andalucía, which helps maintain the purchasing power of citizens in inflationary crises: the known as Deflaction of the Income Tax of natural persons (IRPF).
“In a context of inflation, Salaries usually increase to compensate for the loss of purchasing power. However, if the IRPF sections do not fit in line, these salary increases can place taxpayers in higher tax sections, which translates into a greater fiscal load without a true increase in real terms of their income, “explain the Fidelitas group on their website, a specialized entity in legal, financial and accounting advice, which requires that this phenomenon is known” as ‘cold progressivity’ can erode the purchasing power of citizens“
“Deflaction implies readjusting the limits of personal income tax and personal and family deductions according to the consumer price index (CPI). For example, for example, for example, If the annual inflation is 3%, the sections and deductions would be increased by that same percentage. In this way, taxpayers are avoided ascending higher sections only by salary adjustments linked to inflation, “they say.
To better understand what the deflation consists of, the Fidelitas group sets the example of a wage earning with a gross annual salary of 30,000 euros to which a 2.8% increase due to inflationwhich results in a new salary of 30,840 euros gross per year.
In parallel, the IRPF sections, which is a progressive tax, which means that the more you want to pay, they also rise 2.8%. In this case, this person would pay without default up to 7,417.5 euros of IRPF per year, while With deflation would be 7,367.82, almost 50 euros less.
“We don’t have a linked inflation”
For this year 2025, no regional government wanted to deflate The IRPF rate in 2025 when considering that it is no longer necessary due to the downward trend experienced by the CPI.
This was justified at the end of 2024 Rocío AlbertMinister of Economy, Finance and Employment of the Community of Madrid, one of the regions that most opted for the measure when inflation climbed up to the two digits. “Fortunately now we do not have unbridled inflation. Last year we had two -digit growthwhich is not given in this situation and the data is indicating to us is that we will be closer and closer to 2%, “he said.
Recently, the Registry of Fiscal Advisors (Reaf) economists, the body specialized in taxation of the General Council of Economists of Spain, has revealed that an average income of 30,000 euros would have saved up to 255 euros If the IRPF rate had been defended according to the Consumer Price Index (CPI) accumulated of 2022, 2023 and 2024, which is 12.5%.
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