The international data on Tax Freedom Day gives us an idea of just about where Navarra and Spain are situated in the European context. The tax burden in the European Union (EU-27) is 4.67 points higher than that of Spain, so Tax Freedom Day is celebrated seven days later than in Spain, i.e., the 28th of May.
Table 1. Tax Freedom Day (2007)
The first European country that puts paying taxes behind it is Slovakia, on the 16th of April, followed by the Baltic countries, Romania, and Ireland, that all celebrate Tax Freedom Day in the second fortnight of April. Navarra ranks here, celebrating its Tax Freedom Day ten days later than Slovakia, on the 26th of April. Its reduced size and high GDP are the main factors that determine its privileged position, amongst the countries with a reduced tax burden.
In the month of May, though during the second fortnight, Tax Freedom Day arrives to Luxembourg, the United Kingdom, Portugal, Slovenia, Hungary, Holland, Germany, and Spain.
Less fortunate are the Cypriots, Finns, Austrians, Norwegians, Italians, French, and Belgians, who all have to wait until the first fortnight of June to be freed from their tax obligations.
Sweden and Denmark are the last to celebrate Taxpayers' Day, celebrating it towards the end of June. The last, depending on how you look at it, the first, since these are the countries that lead in terms of development of the welfare state. The main difference among the countries found at the extremes of the ranking is the model of the State by which they are governed: large or small. What sometimes proves to be surprising is that countries with smaller models, such as the Baltic countries, Ireland, Slovakia or regions such as Navarra, dedicate more money to health and education than other countries with larger models, or that usually obtain a higher punctuation in the Human Development Index (HDI) of the UN.
Regarding the evolution of tax burden, in the last twelve years, seven countries have remarkably reduced the tax burden: between 4.16% in Slovenia and 27.3% in Slovakia. Among them are Estonia, Bulgaria, Finland, and Latvia.
Table 2. Evolution of Tax Freedom Day
On the other hand, seven other countries have increased their respective tax burdens in varying degrees ranging anywhere from 5.1% to 28.3% (Malta, Portugal, Greece, the United Kingdom, Lithuania, Italy, and Spain.) In 1995, the tax burden in Spain reached 32.9%, and Tax Freedom Day came on the 30th of April; but in the last twelve years this tax burden has increased by an additional 18.1%, resulting in a postponement of tax freedom of 21 days in 2007, or the 21st of May.
The reason why some countries have reduced their tax burdens while others have increased theirs is not necessarily the reduction of taxes. Tax Freedom Day measures the relation between the gross domestic product (GDP) and revenue generated by taxes, therefore the tax burden can actually decrease if the GDP growth rate is higher than tax collection. In general, fluctuations in tax burden are generated either by changes in economic activity (affecting employment and the consumption of goods and services) or by tax legislation (which affects tax rates, exemptions, deductions, etc.)
