“To appreciate what you have, there is nothing like knowing what it costs. The average cost of hospitalization amounts to more than 5,000 euros. The average cost of surgical procedures is more than 7,500 euros. The cost of a hospital admission in an ICU bed for COVID exceeds 19,000 euros. The total cost of hospitalization in the network of hospitals of the National Health System exceeds 16,000 million euros; a figure greater than the total budget of 13 autonomous communities. For each child enrolled in school, the State spent €6,230. And for each son studying at the university, 9,589”. The one who remembers him is the Prime Minister. And not before any audience, but before the business elite that the prestigious La Toja Forum gathers every year. Pedro Sánchez closed the IV edition through a video recorded with a resounding allegation in favor of the public and fiscal progressiveness and with an even more categorical warning against the lack of solidarity of those who proclaim to lower taxes in this context of crisis. What underlies, in his opinion, behind the approach of the right is the dismantling of the Welfare State.
The president avoided speaking in the abstract and put figures on the services that are paid for with taxes. “We are talking -he said- of services that illustrate an uncomfortable truth for the spokesmen of fiscal lack of solidarity: the vast majority of people receive more services than they pay in taxes”.
After claiming the Iberian exception and boasting that President Macron has asked that it be made the European standard, he expressed his concern about the rise in inflation while recalling that his Government has already mobilized aid worth more than 35,000 million euros, equivalent to 2.9% of GDP. “It is about -he continued- offering a resounding response from the state to protect people. To protect income, families and companies, as we already did in the hardest moment of the pandemic.
Like the rest of the politicians, businessmen, economists and thinkers who have passed through La Toja since Thursday, Sánchez spoke of a horizon of uncertainty, for which the only thing that can be chosen are the answers to offer to the public. It was here that he contrasted the path of social protection and public spending chosen by his government to deal with this crisis and the path chosen to overcome the financial crisis of 2008 which, in his words, “has been discredited by history and by the evidence”.
Sánchez defended the welfare state as a tool to combat inequality and defend social justice, but recalled that social justice requires fiscal justice. This is that “each one contributes according to their capacity”, a principle that he recalled impregnates our constitutional pact.
Around the question, what welfare state do we want?, he chained others to highlight the importance of the options to choose in the face of the economic crisis: strengthen or weaken the welfare state? Strengthen public services or weaken them? Protect ourselves collectively against the risks of future crises or disarm ourselves?
Spain, in his opinion, does not have a spending problem, “as some pretend to do.” Before the pandemic, ours was “the sixth country in the European Union with the least tax revenue and the eleventh with the least public spending. In fact, our levels of income and public spending have been 8 and 5 points below the EU average in recent years. They raise and spend more than us Italy, France, Belgium, Germany, Finland, Austria, the Netherlands, Sweden and Denmark”
All this to infer that “what we cannot claim is to have a welfare state like the Nordic countries with levels of tax revenue typical of less advanced countries.” “Do we want to be Europeans with a European welfare state?”, he asked again to give himself an answer: “If we answer affirmatively, we must be consistent and provide income to that welfare state. A second question immediately arises: who should pay for this welfare state?
And here he used not only the principles of classical social democracy, not what the Constitution says to defend that the social state “must be paid for by all citizens in proportion to their income.” Something that must be defended today, however obvious it may be: taxes must be progressive and those who have the most must contribute more to the common fund. What the Government defends is in line with the latest guidelines issued by the main international organizations, the OECD, the IMF, and the ECB, which, Sánchez recalled, also “question the fiscal irresponsibility that some display and advise following a path clear: tax the highest incomes to provide services and protection to the middle and working classes”. The statements of the chief economist of the ECB, Philip Lane, this week pointed out in this line.
“When a unilateral reduction in income is postulated, the real question we must ask ourselves is what public benefits and services want to be reduced,” he said, clearly alluding to the right that he avoided mentioning by its acronym. His impression is that today “the formulas for dismantling the public protection system” are reappearing, just after having verified that “in the hardest part, it is the public that saves us. To all. To the rich and the poor. Also to those who believe they are exempt for not being users of public health and education. To those who think that security, infrastructure, the consular network or emergency services pay for themselves”.
“What welfare state do we want?”, he asked himself again to chain other questions along the same line: “Do we naturally accept that a person can fall into poverty because they cannot afford a hip operation? Are we willing to tolerate a woman having to mortgage her home to pay the bill for cancer treatment? In Spain, a person gets a mortgage to buy a house or a car. Do we accept as logical that she has to do it to send a daughter to college?”
Sánchez lamented that it is necessary to remember these obvious things when sorcerers who rescue their failed recipes and proclaim that “money is better in the pocket of citizens” reappear among us, he affirmed to question that the solutions depend on the pocket of each citizen and reject of I fill the doctrine of “every man for himself”
For all these reasons, he defended the package of fiscal measures and because, according to his words, it abounds in a binomial that he considers inseparable: that of social justice with that of fiscal justice to advance social cohesion and combat inequality. Later, he stopped again at the data: with this proposal, a married worker with a salary of 19,000 euros and a joint return will benefit from savings of more than 330 euros. A pensioner who receives a pension of less than 16,500 euros will have a saving of 689 euros. And a single-parent worker with two children and a salary of less than 18,500 euros will benefit from savings of 516 euros.
This government is clear that any tax relief must focus on the social majority, and “not on benefiting a few.” Also that in the current circumstances it is necessary to request an effort of solidarity from those who have the most to help finance the protection of the vast majority. His tax package, he said, reduces the tax gap between income from work and capital and includes relief measures with a potential reach of one and a half million self-employed workers and more than 400,000 SMEs. Without going into more detail, he did say about the solidarity tax on large fortunes, that “the costs of the crisis cannot fall on the working middle class, as happened a decade ago” and that this time “the wealthiest, those who come the shoulder to move the country forward”.