Editor’s note: This article was first published in September 2011. It was written on 16 September 2011, when Spain reinstated the wealth tax for 2011-2012, ahead of the 20 November 2011 general election. Emilio Botín died in 2014, and SICAV and wealth tax rules have changed since.
Two of Spain’s largest fortunes, belonging to two of the richest men in the world, will be exempt from the wealth tax the government has approved to tax large fortunes. The tax rules for SICAVs (variable capital investment companies) have not been changed, and these companies hold a large share of the great fortunes, not only those of Amancio Ortega and Emilio Botín, but those of hundreds of wealthy people in Spain.
As the saying goes, there have always been rich and poor, but when it comes to paying taxes we can see that there are the rich, and then there are the rich with class.
That’s why we always insist that money has to keep moving, because a saver loses part of their savings. A well-advised investor, on the other hand, manages to keep their capital intact while also earning capital gains and tax benefits.
In the same way, the foundations of the wealthy would not pay this tax either. In fact, it’s no secret that charitable organizations can generate astonishing tax benefits, which is why many millionaires and large corporations set them up (in some cases).
The wealth tax is controversial once again, as some voices claim that it will end up taxing the middle class: people with €700,000 in assets are savers, not the rich. They are the ones who lived frugally in their day, putting their paychecks in the bank so they could enjoy a comfortable retirement.
Naturally, these “savers”, on learning that the “truly rich” are exempt, now feel like victims. Some have even said they won’t vote for Rubalcaba in the 20 November election 🙂
Featured image: UNED Universidad Nacional de Educación a Distancia; derivative work: Ecemaml, CC BY-SA 3.0, via Wikimedia Commons.
