Is the Tax Consensus Heading for a Bump or a Cliff? The Current Generational Divide in Spaniards' Tax Attitudes

The aim of this paper is to assess whether a generational divide in tax attitudes might be emerging in welfare states, potentially challenging the current constitutional consensus on taxation. Using Spain as a case study, we rely on the unique questionnaire included in the 2024 wave of the Spanish Institute for Fiscal Studies' Fiscal Barometer to examine whether such generational divide might be emerging in tax attitudes. Specifically, we are first to provide intergenerational evidence on whether current adult generations differ in their intrinsic motivation to pay taxes, their opinions about the redistributive aim of tax systems and their preferences regarding the direct-indirect tax mix. According to our results, Baby Boomers tend to express higher levels of tax morale and a wider acceptance of the tax system - particularly direct taxes - as a tool to redistribute income. In contrast, younger adult generations are found to embrace significantly lower levels of those same dimensions. These results raise the question of whether current levels of political and gender polarization over public policy may also contribute to an eventual generational divide in tax attitudes and eventually threaten the sustainability of the welfare state. Our additional analyses somewhat surprisingly find that younger male generations exhibit slightly stronger pro-tax attitudes than their female counterparts. Should these differences in preferences and tax attitudes become structural and entrenched, the current fiscal consensus may be heading for a cliff and the sustainable funding of the welfare state might no longer be taken for granted. Several policy recommendations follow.