Spain's pension officials deserve credit for locating the one revenue stream that has never failed them: the same workers whose earlier contributions already proved inadequate. By routing the hundred-billion-euro annual transfer through an IRPF surcharge, they convert a structural deficit into a fresh line item that looks like prudent housekeeping rather than an admission the original model is exhausted. The move keeps every pension cheque on schedule while the people paying both the original contributions and the new levy receive the honour of closing the gap they did not create.
Fedea item 54 and item 77 arrive at the identical prescription—an increase in personal-income-tax rates—after documenting that the Social Security shortfall still exceeds 100 billion euros a year. No modelling of benefit cuts appears. No alternative revenue base is introduced. The cost simply travels from the general budget to the payslip of the cohort already declared insufficient. Minister for Inclusion and Social Security Elma Saiz endorses the framework; one wonders what arithmetic she applies when the same workers are asked to fund the transfer twice.
The sequence unfolds with bureaucratic elegance. First the state under-collects, then it borrows from the Treasury, then it proposes to tax the shortfall back into existence. Compare the process to a household that empties its own wallet into a drawer and then charges itself a fee to retrieve the money. Each step preserves the outward promise while moving the actual burden one layer closer to the remaining contributors. Demographic projections already forecast fewer workers per pensioner; the surcharge does not alter that ratio, it merely extracts more from each survivor.
The same circular route now extends to the regions. Andalusia and Catalonia record their own shortfalls yet continue to expect the central transfer. When that transfer itself requires an extra IRPF levy, the regions receive the funds and the national taxpayer receives the bill. The arrangement is labelled coordination. In practice it multiplies the number of administrations that can claim credit while concentrating the cost on the shrinking base that funds all of them.
Escalation follows predictably. The surcharge is introduced as temporary, becomes permanent when the next actuarial report appears, and then requires a second surcharge once the first one fails to close the gap widened by further ageing. Each adjustment is presented as the last necessary tweak. Each adjustment leaves the underlying mismatch between promises and contributors untouched. The only durable product is the need for the adjustment after next.
The Treasury can therefore draft new levy tables with the satisfaction that the alarm about one hundred billion euros will ring again next year at higher volume.