Spanish Government to Reinstate Wealth Tax
September 14th, 2011
At a meeting of the Council of Ministers this Friday, 16th September, the Spanish Government plan to reintroduce the Wealth Tax, which was abandoned in 2008.
Speaking at a rally in the Jaime Vera de Galapagar Institute in Madrid on Sunday, the socialist candidate for president, Alfredo Pérez Rubalcaba, asked the prime minister, José Luis Rodríguez Zapatero, to “reactivate immediately” the “tax on large estates”, a measure which also appears in Rubalcaba’s election manifesto.
Moreover, according to sources close to the candidate, he has requested that the minimum at which tax is payable be raised significantly, thus only taxing the wealthy and not the middle class as was the case previously before the tax was abolished.
Rubalcaba pointed out that the benefits of this decision would be seen in 2012 and “the new government in power would be able to use them.” “If you give me the opportunity to decide in 2012 what to do with it, I will invest it in youth employment,” he explained.
In his day it was Zapatero who approved a one hundred percent exemption from this tax, though it was not totally eliminated, which now allows the measure to be passed by a royal decree without the need for a new law. However, the rule to be adopted on Friday will undergo some modifications so that the middle class is no longer affected.
Europa Press reported that the proceeds of this tax in 2007 (the last year it was declared) amounted to 2,121 million euros. More than half of that revenue was obtained from respondents with taxable incomes above a million and a half euros. Now, it is estimated that the annual revenue of this tax would be around 1,400 million euros.
The same sources have indicated that Rubalcaba will maintain, however, a proposal in his election manifesto to approve a law establishing a new tax on large fortunes which will be a state tax and not a regional tax, as it is now.
