A gender perspective approach regarding the impact of income tax on wage-earning women in Spain

Abstract

Given the persistence of patriarchal relations, the traditional gendered division of labour shapes the Spanish labour market at the present time, thus maintaining and even exacerbating the asymmetrical distribution of domestic work. As a result, variations in the minimum marginal income tax rate predominantly affect women, while any change in the highest marginal rates affect men to a greater degree, as they have higher incomes. Consequently, it can be said that any tax reform that reduces the highest marginal rates in the tax scale has a definite gender impact and clearly benefits men. This was the effect of the reform brought about by Law 40/1998. Conversely, the tax modification introduced in Law 46/2002, which lowered the minimum tax rate from 18 to 15 per cent, positively affected a higher proportion of women than men by reducing their tax burden. This also had the potential of making women’s contribution to paid work more attractive and therefore motivating them to participate or to continue to participate, in the labour market. Thus, the latter reform improved the situation of many women but a number of issues still need to be addressed if Spain and Europe are to move towards complete gender equality. Macroeconomic policies, including fiscal policy, should also be designed to prevent the persistent asymmetrical division of remunerated and non-remunerated work between sexes that still exists in European countries.