Editor’s note: This article was first published in August 2011, ahead of Spain’s November 2011 general election. Its figures are from 2010–2011, including the regional income-tax thresholds. In September 2011 the government reinstated the wealth tax for 2011–2012, contrary to the Salgado statement cited here.
Warren Buffett‘s message (that the rich should pay more taxes) has also “sunk in” in Spain, where the government is studying a possible tax reform to raise taxes on large fortunes. We should point out that in Spain no volunteers have yet come forward asking to pay more taxes, unlike France, where the “rich” offered to pay more to help their country, and Italy, where in a gesture of solidarity with the country the rich have chipped in by buying public debt. Sorry, but in Spain our rich would rather have the middle class and the poor pay for the crisis.
Even so, the government will try to tackle this problem through a possible reform, although, as we’ll see below, we’ll do it the Spanish way, like a tortilla de patatas (Spanish omelette).
Rubalcaba announced that his election platform will include measures to raise taxes on large fortunes, while Vice President Salgado ruled out, in a statement, approving any tax on wealth for the rest of the parliamentary term.
Wealth tax
Asked whether wealth could be taxed again, everything suggests it will be, since the wealth tax never actually disappeared.
“The wealth tax is a tax ceded to the autonomous regions, so even if the central government restores it, each region could scrap it if it sees fit.”
Who counts as rich in Spain?
Nobody knows who can be considered rich in Spain, because the very notion of being rich depends on the autonomous region where it’s applied. Someone rich in Extremadura might not be rich in Madrid. In 2010, the government announced that taxes on the rich would go up. Extremadura would apply the increase to incomes above €60,000, Andalusia to those earning more than €80,000 and Catalonia to incomes above €120,000. So each region decides whose taxes to raise, and lo and behold, the people who really end up paying taxes beyond their means are the middle class, with an annual income of €19,000.
In short: foreign newspapers report today that Spain will join the initiative of France and Italy and the one proposed by the billionaire Warren Buffett. What they don’t report is that in Spain the working class will keep paying for the crisis, and that our rich, far from wanting to pay more taxes, will probably complain about the fact that… they might have to pay more.
Few things surprise me anymore in this life, although maybe one day Emilio Botín will surprise me by saying something like:
“Spaniards, we got you into this crisis, and we will make the effort and do our part to get you out of it.”
I know, a patriotic speech straight out of a Hollywood movie, and pure science fiction in Spain.
Further reading
Featured image: Javier Perez Montes, CC BY-SA 4.0, via Wikimedia Commons.
