Spain has a level of taxation that is below most EU countries. One contributor to this low fiscal pressure is Beckham's Law, which is being phased out, but which since 2004 has allowed top foreign soccer players enjoy a flat 24% tax rate instead of the progressive rate applied to all other mortals. The effect of this tax privilege has been to attract and retain some of the best world soccer players and improve performance in European competitions for top Spanish teams (5 among the 16 best teams if we take, as a measure of performance, being qualified for the quarter finals of the Champions and Europa Leagues). A great empirical study on this by Kleven, Landais and Saez can be accessed here.
A clear example of the potential negative correlation between sports success and broader economic success.
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