The income tax declaration season has begun without adjusting for inflation (deflating tax brackets), which translates to paying 25% more than in 2018.
Direct taxes—Personal Income Tax (IRPF) and Wealth Tax—paid by families in Spain have increased by 56.3% since 2018. This is equivalent to a 31.1% increase in real terms (after removing the effect of inflation). Consequently, each household pays €1,657 more than six years ago—a 25% increase once price hikes are discounted.
“The direct fiscal effort has risen from 13.6% to 15.9% of gross disposable income,” explains the Juan de Mariana Institute in its “2026 Tax-Meter” (Impuestómetro 2026), published this Wednesday, which takes into account the evolution in the number of households. The document specifies that, during this period, the largest increase occurred in 2021 and 2022, coinciding with the inflation peak—prices rose by an average of 3.1% and 8.4%, respectively, in those years.
This phenomenon is known as “bracket creep” (or “cold progressivity”): the impact of inflation on IRPF revenue. It causes any worker who received a salary increase to compensate for inflation to end up paying more to the treasury because the government decided not to adapt the tax brackets. Had the government adjusted them, each person would have paid €682 less.
The lack of bracket adjustment, which the Spanish opposition has repeatedly demanded, “has acted as a silent tax hike,” generating an additional €27.6 billion in revenue between 2019 and 2023 alone, according to the report. Its authors, Diego Sánchez de la Cruz and Santiago Calvo, emphasize that failing to “deflate” the IRPF is highly regressive, as it especially harms low-income earners.
Specifically, a worker earning a gross salary of €18,000 pays €980 in IRPF today, according to the report—nearly “triple” what they paid in 2018. Meanwhile, someone earning €75,000 gross has seen their tax bill grow from €20,243 to €22,697, a 12% increase.
