An empirical analysis of percentage tax designation to the catholic church and other social entities in Spain

Abstract Since 2007, the Spanish State's contribution to funding the Catholic Church comes from what is known as the ‘tax allocation’ ( asignación tributaria ). It is a pure system of percentage tax designation consisting of 0.7% of the tax liability of taxpayers who decide to tick the relevant box on their personal income tax form. From this system, taxpayers may also choose instead, or additionally, to allocate the same percentage to other activities considered of social interest or may choose not to tick either box. In this last case, they waive the option of contributing part of their tax liability directly to religious or social entities. Based on a database published by the Spanish Tax Agency, and applying ordinary least squares techniques, the present paper obtains the profile of taxpayers who opt for each of these alternatives. The results suggest the existence of two clearly delimited and opposing profiles of taxpayers: On the one hand, those who do not tick any tax allocation box or tick both; on the other hand, those who tick only one box, either the one for the Catholic Church or the one for other purposes of social interest.