Barcelona Chamber of Commerce president Joan Canadell has calculated that "40% of all the taxes paid by Catalans do not return to Catalonia". In a Twitter thread, Canadell takes readers through a step-by-step calculation of the fiscal deficit affecting Catalonia. “There are people who don’t believe it, so I’m telling you how to do the sums,” he says. With this exercise, he aims to show "in terms of the major figures, what it means to not have a state of your own" - and, as a consequence, to not be able to manage your own tax revenues.
The president of the key Barcelona and Catalonia business body admits, however, that the calculation is a little more complicated than how he presents it. “But what I’m setting out here is a quick, easy-to-understand approach that you can explain to someone who doesn’t believe it,” Canadell justifies.
How the fiscal deficit is calculated, according to Canadell
First of all, Canadell proposes a check on the website of the Spanish tax agency to find out the taxes that Catalans pay. "In 2018 (the latest for which we have all the data) Catalans paid 43,039 million euros in tax," says Canadell. According to his calculations, this represents 95% of the total taxes paid, with the remaining 5% being the small proportion of tax revenue areas which are ceded to the Catalan government.
Aside from taxes, the Spanish state also gets into debt and that means that in effect it “has access to more money”. Taking into account the debt of the state in 2018 (2.54%), the part corresponding to Catalonia should thus be "2.1% of GDP more", Canadell calculates. "Therefore, from the original Catalonia 43,039 million euros paid in tax, Catalonia's total part of the state revenue is 47,841 million in 2018," argues the Chamber of Commerce leader.
However, the actual budget executed in Catalonia in 2018 was 31,588 million, including state investments in Catalonia. “In 2018 we had a‘ fiscal deficit of 16,253 million eruos,” equivalent to 38% of the taxes paid, Canadell concludes. “Now imagine for a moment what those 16,253 million could have meant for us?” he asks.
To make an approximation of what this would mean, Canadell chooses different spending areas of the Catalan government: "All items in the Education, Health and Labour ministry budgets add up to 16 billion euros." Therefore, he estimates that with the money from the "fiscal deficit" one could "double all social spending" or "reduce taxes by 38% and live at the same level."
With the taxes Catalans pay, "we could among the most advanced"
At the end of the Twitter thread, Canadell reiterates the difficulty of calculating the fiscal deficit in detail. "The calculation of the fiscal deficit is much more complex; for example, we also need to see the balance between pensions and social security contributions, but this exercise serves to show, in terms of the major figures, what it means not to have a state of your own to enjoy the benefit of your own taxes," asserts the Chamber of Commerce president. Furthermore, there is the factor of accumulation over time: Canadell claims that, if this situation had not been endured for "more than 30 years", the situation in Catalonia at present would be very different. "Can you imagine what country we would have now? With the taxes we Catalans pay we could be among the most advanced like the Netherlands, Finland or Denmark," concludes Canadell.
The persistent existence of a large deficit between what Catalonia pays in tax and what it receives back from the Spanish state in investment and services has long been one of the multiple grievances that pro-independence Catalans have used to justify their cause. Opponents, on the other hand, have either denied that such a deficit exists, and/or have dismissed it by playing on the age-old stereotype still widespread in Spain, that Catalans are selfish and greedy.