Academia.org Draft: https://www.academia.edu/169223997/Correlation_Between_Cumulative_Tax_Burdens_Deductibility_of_Tax_Payments_as_Business_Expenses_and_Socio_Economic_Development_Indicators_A_Meta_Comparative_Analysis_in_OECD_Countries_and_a_Proposal_for_Reform_Based_on_the_Principle_of_Economic_Reality
Correlation
Between Cumulative Tax Burdens, Deductibility of Tax Payments as
Business Expenses, and Socio-Economic Development Indicators: A
Meta-Comparative Analysis in OECD Countries and a Proposal for Reform
Based on the Principle of Economic Reality
Mikel
de Elguezabal Mendez – Rodulfo
LEA
Foundation Civil Association
Uharte,
Navarra – Cumaná, Sucre, Venezuela First edition: 2026 (in
progress)
Fundación
LEA, Calle Palmar, D-12, Riberas, 6101 Cumaná, Sucre, Venezuela.
Plaza
Ferial AP 008, Uharte, 31620, Navarra.
In
a Virtuous Earth Collection.
(DRAFT
FOR PEER/ *CO AUTHORS REVISION, FOR A SUITABLE
SCIENTIFIC
JOURNAL, OR FOR AN ESSAY BOOK IN AMAZON)
*send
comments, critiques, improvements and a statement if you
want
to become co-author of this work for publication as a paper or
book.
Email: a6labs@gmail.com , to Mikel de Elguezabal Mendez-
Rodulfo,
LEA Foundation Editorial
Abstract
This
paper examines the impact of high cumulative tax burdens on
self-employed individuals and SMEs, focusing on the limited practical
deductibility of personal income tax (PIT) and social security
contributions paid from business cash flows. Through a meta-analysis
of fiscal, economic, and business studies in OECD countries, the
analysis compares tax burdens with indices of economic freedom, Human
Development Index (HDI), unemployment, human happiness, and quality
of life. Results indicate that higher distortive tax burdens tend to
correlate negatively with entrepreneurial dynamism and certain
well-being indicators, although outcomes depend heavily on public
spending efficiency. The paper discusses a proposal to recognise
(total or partial) deductibility of these tax payments as business
expenses in the relevant year. This would create an approximate
biennial relief cycle, conceptually modelled as a Lotka-Volterra
predator-prey dynamic of double adaptation, with the entrepreneur as
prey and the public system/government as predator. The study
concludes with a formal petition for technical, legal, and policy
debate in competent bodies, particularly in the Foral Community of
Navarre, Spain.
Keywords:
Tax burden, deductibility of taxes, SMEs and self-employed, OECD,
economic freedom, human development, Lotka-Volterra economic models,
economic reality principle.
Introduction
Self-employed
workers and family businesses face a structural tension: payments of
personal income tax (IRPF/PIT) and social security contributions,
although directly arising from economic activity, are deducted from
business liquidity without full recognition as deductible expenses.
This creates a mismatch between real cash flows and fiscal-accounting
treatment, affecting the sustainability of SMEs (OECD, 2025). In most
OECD countries, personal income tax is not deductible to avoid
logical circularity, while social security contributions for the
self-employed are often treated more favourably as necessary business
expenses. However, ongoing debates persist regarding tax neutrality,
proportionality, cash-flow effects, and the principle of causality
linked to economic reality. Recent Spanish Supreme Court
jurisprudence has shown greater flexibility, prioritising economic
substance over excessive formalism in certain cases involving
self-employed expenses. This proposal seeks improved correlation
between accounting and tax treatment by allowing tax payments made
from business funds to be recognised as deductible expenses. Such
recognition could generate periodic relief approximately every two
years, modellable as an adaptive predator-prey dynamic.MethodologyA
qualitative-quantitative meta-analysis was conducted on global
literature (fiscal, economic, and business studies in OECD/OMC
contexts) combined with comparative analysis of secondary data.
Primary sources include OECD Taxing Wages reports, Heritage
Foundation Index of Economic Freedom, UN Human Development Index,
World Happiness Report, World Bank data, and Tax Foundation analyses.
Inclusion criteria focused on post-2015 studies addressing tax wedge,
impact on SMEs, and correlations with growth, unemployment, and
well-being. Countries with high versus low cumulative tax burdens
(measured as tax-to-GDP ratio or tax wedge) were compared.
A
conceptual Lotka-Volterra model was incorporated to simulate
entrepreneur-government interaction cycles.
Results
OECD
countries exhibit significant variability. The average tax wedge for
a single average-wage worker stood at approximately 35% in recent
years, with extremes ranging from Belgium (around 52%) to Chile
(around 7%) (OECD, 2025).
Table
1: Comparative Examples (approximate data 2024-2025)
|
Country
|
Tax
Wedge (%)
|
Tax
Burden (% GDP approx.)
|
Economic
Freedom (Heritage)
|
HDI
(UN)
|
Unemployment
(%)
|
Happiness
(Ranking)
|
Quality
of Life
|
|
Belgium
|
52+
|
High
(~45%)
|
Medium
|
Very
High
|
~6
|
Medium-High
|
High
|
|
Switzerland
|
Low-Medium
|
Moderate
|
Very
High (Top 3)
|
Very
High
|
Low
(~4)
|
High
|
Very
High
|
|
Chile
|
~7
|
Low
|
High
|
High
|
Medium
|
Medium
|
Medium-High
|
|
United
States
|
Medium
|
~26%
|
High
|
Very
High
|
~4-5
|
Medium-High
|
High
|
|
OECD
Average
|
~35
|
34-40%
|
Variable
|
High
|
~5-6
|
Variable
|
High
|
Countries
with higher economic freedom (lower distortive burdens) generally
show better alignment with per capita growth, HDI, and life
satisfaction, although Nordic countries demonstrate that high taxes
combined with efficient spending can sustain strong well-being
outcomes (Heritage Foundation, 2026).
Meta-analyses,
such as Alinaghi and Reed (2020), indicate that a 10% tax increase is
associated with approximately -0.2% annual GDP growth in negative
fiscal packages, but can be neutral or positive when paired with
productive spending.
Discussion
Scholars
supporting greater deductibility and neutrality emphasise the
principle of economic reality, ability-to-pay, and non-confiscatory
taxation. Recognising payments from business treasuries as expenses
would improve income-expense matching, enhance SME liquidity, and
promote equity, consistent with comparative OECD doctrine. This
approach could establish a biennial relief cycle, interpretable
through a Lotka-Volterra framework: the entrepreneur (prey)
periodically recovers from the fiscal system (predator), fostering
mutual adaptation and dynamic sustainability (inspired by
applications such as Goodwin, 1967; and modern extensions in market
dynamics). Opposing views stress that non-deductibility of own-tax
liabilities prevents circularity and potential arbitrage, maintaining
a stable tax base and administrative simplicity—an international
standard.
Poorly
designed changes risk base erosion. Nevertheless, existing
deductibility of social contributions and recent jurisprudential
trends support pragmatic evolution toward greater alignment with real
economic flows.
The
proposal does not seek to eliminate taxation but to better align
accounting treatment with actual cash movements, contributing to
broader debates on fairness for self-employed workers and family
businesses in Europe.
Annex:
General Petition, Complaint and Request for Debate on Tax
Matters
[Full original petition text by Mikel de Elguezabal Mendez
can be attached as a formal annex, adapted for submission to the
Foral Tax Authority of Navarre, Parliament of Navarre, and Chamber of
Comptos, requesting examination of the case, legal grounds, and
elevation for normative debate.]
References
Alinaghi,
N., & Reed, W. R. (2020). Taxes and economic growth in OECD
countries: A meta-analysis. Public Finance Review, 49(1), 3-40.
Goodwin,
R. M. (1967). A growth cycle. In C. H. Feinstein (Ed.), Socialism,
capitalism and economic growth. Cambridge University Press.
Heritage
Foundation. (2026). 2026 Index of Economic Freedom. Washington, DC:
The Heritage Foundation.
OECD.
(2025). Taxing Wages 2025. OECD Publishing.
OECD.
(2026). Taxing Wages 2026. OECD Publishing.
United
Nations Development Programme. (various years). Human Development
Report.
World
Happiness Report. (various years). United Nations Sustainable
Development Solutions Network.
Gandolfo,
G. (2009). Economic Dynamics. 4th Edition. Springer. (Provides a
comprehensive treatment of Lotka-Volterra equations and their
applications to economic cycles and interactive systems).
Goodwin,
R. M. (1967). A growth cycle. In C. H. Feinstein (Ed.), Socialism,
capitalism and economic growth. Cambridge University Press.
Marasco,
A., & Romano, A. (2018). Interacting markets and the emergence of
complex dynamics: A Lotka-Volterra approach. Journal of Economic
Interaction and Coordination.
Vadasz,
V. (2022). An economic application of the Lotka-Volterra
predator-prey model. Undergraduate Thesis, Franklin & Marshall
College.
Cerqueti,
R., Tramontana, F., & Ventura, M. (2015). Market share dynamics
using Lotka–Volterra models. Technological Forecasting and Social
Change, 91, 340-351.
OECD
(2015). Taxation of SMEs in OECD and G20 Countries. OECD Publishing.
OECD
(2023). Tax Policy and Inclusive Growth. OECD Tax Policy Studies.
European
Commission (2022). Annual Report on Taxation 2022.
Directorate-General for Taxation and Customs Union.
Studies
on dynamic fiscal models: works applying predator-prey frameworks to
taxpayer-regulator interactions and fiscal compliance cycles (e.g.,
applications in tax evasion modelling by authors such as Hashimzade
et al., 2019).
INSTANCIA
GENERAL DE PETICIÓN, QUEJA Y SOLICITUD DE DEBATE EN MATERIA
TRIBUTARIAD./
Dña.
Mikel de Elguezabal Mendez
DNI:
73492846A
Domicilio
a efectos de notificaciones: Plaza Ferial AP 008, Uharte, Navarra,
31620
Teléfono
(WhatsApp): 601312297
Correo
electrónico: a6labs@gmail.com
EXPONE:Que
en mi condición de autónomo y empresario, junto con mi cónyuge,
hemos satisfecho en el ejercicio 2026 importes significativos en
concepto de Impuesto sobre la Renta de las Personas Físicas (IRPF
Foral) y cuotas de Seguridad Social, derivados directamente de la
actividad económica desarrollada.Estos pagos se realizan con cargo a
la tesorería de la empresa familiar, afectando directamente a su
liquidez real, a la capacidad de reinversión y a la sostenibilidad
económica de la unidad familiar.Que existe una omisión relevante en
el tratamiento contable y fiscal al no reconocerse como gasto
deducible los pagos de impuestos y cotizaciones realizados desde
fondos empresariales. Esta falta de correlación entre los flujos
económicos reales y el tratamiento fiscal genera distorsiones que
perjudican a las pymes y autónomos.Estudios comparados en países
OCDE muestran que elevadas cargas fiscales acumuladas correlacionan
negativamente con el dinamismo empresarial, el crecimiento económico
y ciertos indicadores de bienestar (desarrollo humano, desempleo,
felicidad y calidad de vida), especialmente cuando el sistema no
mantiene una adecuada neutralidad y correlación con la realidad
económica.SOLICITO:Que la Hacienda Foral de Navarra admita esta
instancia, examine el caso y me informe del fundamento normativo
exacto que impide la deducibilidad de estos pagos, valorando la
emisión de una consulta vinculante o la revisión de criterio.
Que
se eleve esta cuestión al Parlamento de Navarra (Comisión de
Hacienda y Presupuestos) para debatir una posible reforma o
aclaración normativa que permita el reconocimiento, total o parcial,
de la deducibilidad de estos gastos como propios de la actividad
empresarial, mejorando la correlación ingresos-gastos y la equidad
del sistema.
Que
la Cámara de Comptos de Navarra tome conocimiento de esta petición
en el marco de sus funciones fiscalizadoras, evaluando si el actual
tratamiento genera efectos no deseados en la economía real de las
pymes y autónomos navarros.
Que
se me mantenga informado de todas las actuaciones y se me trasladen
las resoluciones e informes emitidos.
FUNDAMENTOS:Principio
de realidad económica (art. 13 LGT y normativa foral).
Principio
de capacidad contributiva y no confiscatoriedad (art. 31 Constitución
Española).
Necesidad
de correlación entre ingresos y gastos en la actividad económica.
Evidencia
de meta-análisis en países OCDE que relacionan una mejor
neutralidad fiscal con mayor libertad económica, desarrollo humano y
bienestar.
Posibilidad
de generar un ciclo de alivio fiscal aproximado cada dos años, que
podría interpretarse como una dinámica adaptativa positiva entre el
emprendedor y el sistema público.
En
Pamplona/Iruña, a 26 de junio de 2026.Firma:
Mikel
de Elguezabal Mendez
DNI
73492846A
OROKORREKO
ESKAERA, KEXA ETA ZERBITZU TRIBUTARIOARI BURUZKO DEBATE-ESKAERA
Jauna/Andrea
Mikel de Elguezabal Mendez
NAN:
73492846A
Jakinarazpenetarako
helbidea: Plaza Ferial AP 008, Uharte, Nafarroa, 31620
Telefonoa
(WhatsApp): 601312297
Posta
elektronikoa: a6labs@gmail.com
ADIERAZTEN
DU:Autonomo eta enpresari gisa, nire ezkontidearekin batera, 2026.
urtean kopuru esanguratsuak ordaindu ditugula Pertsona Fisikoen
Errentaren gaineko Zerga Forala (IRPF Forala) eta Gizarte
Segurantzako kuotak, enpresa-jardueratik zuzenean
sortutakoak.Ordainketa horiek enpresa-familiarraren kutxategitik
egiten dira, enpresaren likidezia errealari, berriro inbertitzeko
gaitasunari eta familia-unitatearen iraunkortasun ekonomikoari
eragiten diotela.Tratamendu kontable eta fiskalean huts nabarmena
dagoela uste dut, enpresa-funtsen bidez ordaindutako zerga eta
kotizazioak gastu dedukigarri gisa aitortzen ez direlako. Enpresaren
fluxu ekonomiko errealen eta tratamendu fiskalaren arteko korrelazio
falta honek distortsioak sortzen ditu, Nafarroako ETE eta autonomoen
kalterako.OCDEko herrialdeetan egindako azterketa konparatuek
erakusten dute zama fiskal metatu handiek erlazio negatiboa dutela
dinamismo enpresarialarekin, garapen ekonomikoarekin eta
ongizate-adierazle batzuekin (garapen gizatiarra, langabezia,
zoriontasuna eta bizitza-kalitatea).ESKATZEN DUT:Nafarroako Foru
Ogasunak eskaera hau onartzea, kasua aztertzea eta enpresa-funtsen
bidez ordaindutako ordainketen dedukzioa eragozten duen oinarri
normatiboa jakinaraztea, kontsulta lotesle bat edo
irizpide-berrikuspena baloratuz.
Gai
hau Nafarroako Parlamentura (Hacienda eta Aurrekontuen Batzordea)
igotzea, arau-aldaketa edo interpretazio-argibide bat eztabaidatzeko,
gastu horien dedukzioa (guztizkoa edo partziala) aintzat hartzeko,
diru-sarrera-gastu korrelazioa eta sistemaren berdintasuna hobetuz.
Nafarroako
Kontuen Ganberak eskaera hau jakin dezala, bere kontrol- eta
aholkularitza-funtzioen esparruan, eta ebalua dezala tratamendu honek
nahi ez diren ondorioak sortzen dituen ETE eta autonomoen ekonomia
errealan.
Abiarazitako
jarduera guztien berri eman dakidala eta emandako ebazpen eta
txostenak bidal dakizkidala.
OINARRIAK:Ekonomia-errealitatearen
printzipioa.
Gaitasun
contributiboaren printzipioa eta konfiskatzaile ez izatea.
Diru-sarreren
eta gastuen korrelazioa.
OCDEko
meta-analisien ebidentzia.
Enpresaria
eta sistema publikoaren arteko dinamika adaptatibo positiboa sortzeko
aukera.
Uharte,
2026ko ekainaren 26an.Sinadura:
Mikel
de Elguezabal Mendez
NAN
73492846A3.
GENERAL
PETITION, COMPLAINT AND REQUEST FOR DEBATE ON TAX MATTERS
Mr.
Mikel de Elguezabal Mendez
ID:
73492846A
Address
for notifications: Plaza Ferial AP 008, Uharte, Navarra, 31620, Spain
Telephone
(WhatsApp): 601312297
Email:
a6labs@gmail.com
STATES:That
as a self-employed worker and entrepreneur, together with my spouse,
we have paid significant amounts in Personal Income Tax (Foral IRPF)
and Social Security contributions in 2026, derived directly from our
economic activity.These payments are made from the company’s
treasury, directly affecting its real liquidity, reinvestment
capacity, and the economic sustainability of the family unit.That
there is a relevant omission in the current accounting and tax
treatment by not recognising as deductible business expenses the tax
and contribution payments made from business funds. This lack of
correlation between real cash flows and fiscal treatment creates
distortions that harm SMEs and self-employed workers.Comparative
studies in OECD countries show that high cumulative tax burdens tend
to correlate negatively with entrepreneurial dynamism, economic
growth, and certain well-being indicators (human development,
unemployment, happiness, and quality of life), particularly when the
system does not maintain adequate neutrality and correlation with
economic reality.REQUESTS:That the Foral Tax Authority of Navarre
admit this petition, examine the case, and inform me of the exact
legal grounds preventing the deductibility of these payments,
considering the possibility of issuing a binding consultation or
reviewing its interpretive criteria.
That
this matter be raised before the Parliament of Navarre (Finance and
Budget Committee) to debate a possible regulatory reform or
clarification allowing the (total or partial) deductibility of these
expenses as business costs, improving income-expense correlation and
the fairness of the tax system.
That
the Chamber of Comptos of Navarre be informed of this petition within
its auditing and advisory functions, assessing whether the current
treatment produces undesired effects on the real economy of Navarrese
SMEs and self-employed workers.
To
be duly informed of all proceedings and receive copies of any
resolutions or reports issued.
GROUNDS:Principle
of economic reality.
Ability-to-pay
principle and non-confiscatory taxation.
Correlation
between income and expenses.
Evidence
from OECD meta-analyses linking better fiscal neutrality with greater
economic freedom, human development, and well-being.
Potential
to create a positive adaptive fiscal relief cycle approximately every
two years between the entrepreneur and the public system.
In
Pamplona, 26 June 2026.Signature:
Mikel
de Elguezabal Mendez
ID
73492846A
.jpg)
