Spain’s Socialist government has resurrected a hotly
contested plan to impose a wealth tax next year, according to party leaders
eager to spread the burden of austerity and reassure financial markets that the
country will control its budget deficits.
Alfredo Pérez Rubalcaba, the Socialist party candidate
for prime minister in November’s general election, said he wanted the tax to
target “the biggest fortunes, not the middle class”.
Mr Rubalcaba, who is expected to be defeated by the
opposition Popular party, added: “If I win, it will make possible employment
programmes for the young.”
Like Italy,
another big Mediterranean economy regarded as increasingly risky by sovereign
bond investors, Spain
has dithered for weeks about the merits of a wealth tax.
The government buried the idea as impractical some time ago, but is now
expected to announce the restoration of the tax after a cabinet meeting.
Elena Salgado, finance minister, had complained that no
wealthy Spaniards – unlike millionaires in France
and the US
– were offering to pay more tax. However, Joan Rosell, who heads the employers’
federation, subsequently suggested that those with the highest incomes should
make sacrifices along with everyone else.
In 2008, its last year of application, Spain’s wealth
tax raised about €2.1bn from 1m people, charging them between 0.2 and 2.5 per
cent of their declared assets. When the tax is revived in accordance with Mr
Rubalcaba’s wishes, it will be focused more tightly on the very wealthy and is
likely to raise only about €1bn a year.
This largely symbolic amount, representing just 0.1 per
cent of gross domestic product, is unlikely to reassure creditors nervous about
a possible Greek debt default and its effects on other eurozone countries,
including Spain.
Mr Rubalcaba said it was necessary to “isolate” Greece, which was “infecting” other
European economies.
This article has been prepared by
specialists of ABLV Corporate Services based on mass media publications.
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