Spain prepares tax hike for the rich
Opposition PP argues for budget ‘austerity' instead
By David Eade
José Blanco during RNE radio interview
The minister for public works, José Blanco, one of the senior ministers in PM Zapatero's cabinet, has signalled that a U-turn is in the offing and tax increases for the rich could be on the way. This has led to protests from the centre-right Partido Popular. Leader Mariano Rajoy has instead called for "austerity" and wants Spain's budget deficit reduced to three per cent of GDP - the widely ignored level set by the EU.
Last week in a radio interview Sr Blanco stated: "If we need to raise certain tax rates in order to guarantee social policies or public investment, then we'll have to do it.
"I believe in helping those who most need it and if in order to help the needy those who can most afford it have to tighten their belts in times of hardship, then we must say so clearly to the public."
Spain has moved from a 2007 surplus of 2.2 per cent of gross domestic product to a projected deficit of 10 per cent or more this year. Spending has risen because Premier José Luis Rodríguez Zapatero has promoted nationwide public works to stop unemployment rising even higher than the current level of 18 per cent.
Following Britain?
So Spain could now follow in Britain's footsteps where top rate personal income tax will rise from 40 to 50 per cent next year. In June Spanish ministers, who had previously presided over the abolition of Spain's wealth tax, were denying the need for drastic tax rises. However, fuel and tobacco taxes have risen and business leaders fear increases in other taxes, including value-added tax and possibly income tax.
Read the coments to the article published in Costa News
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