Taxes and tributes

The public revenue needed to pay for common needs and the public services we all benefit from (schools, hospitals, roads, etc.) is primarily obtained through the taxes we citizens pay, in accordance with the laws of our country.

A tax is an amount of money that citizens must pay so that public administrations can cover public expenses for everyone.

Taxes are not a fixed amount equal for all citizens, as this would be unfair, since not everyone has the same amount of money. Therefore, those who have more or earn more pay more taxes, while those who have less money pay less taxes. This is called “economic capacity.” The economic capacity of people can be known through the things they have, that is, their wealth (assets), through the money they earn (income) or through what they spend on purchases (consumption). Therefore, there are several types of taxes, for each of these manifestations of what we have called people's "economic capacity."

There are two kinds of taxes:

• Direct taxes, which allow those who have more or earn more money to pay higher amounts than those who have less and receive lower incomes. One of the most well-known direct taxes is the Personal Income Tax (IRPF), which people pay based on their earnings—that is, the salary they receive, the benefits a doctor, a lawyer, a plumber, or a taxi driver receives, etc. There are other direct taxes, such as those paid by companies (Corporate Tax) or those paid by people who receive an inheritance from someone who has died (Inheritance Tax).

• Indirect costs, which are those that everyone has to pay equally when making the same purchase, regardless of whether they earn or have more or less money. The best known is VAT, which is paid every time we buy something, for example, a t-shirt, a pen, a notebook or a soft drink. We all pay the same amount when we buy the same things, regardless of whether we have more or less money. There are other indirect taxes, such as those paid when you put gas in your car or when you buy tobacco or alcoholic beverages (Excise Taxes), or when you buy an apartment to live in.

There are also other amounts (called fees) that we have to pay to enjoy services that are important to our lives, for example, to have our garbage taken away or to have drinking water at home.

Finally, as you all know, in Spain, in addition to the State, there are Autonomous Communities, Provinces and Municipalities; Well, according to this, there are not only taxes from the State but also from these other Public Administrations.