WEALTH TAX MAKES ITS WAY BACK!
The new Socialist candidate for the November 2011 presidential elections, Mr Rubalcaba, proposes to resurrect Wealth Tax. Please see our last posting on this topic at Taxprecision.com Fortunately enough, his chances to win the elections are very limited, plus no other party will support such ridiculous measure. It is unfortunate that politicians use Taxes to win the elections instead as using them as wise macroeconomic vehicles to improve the economy.
Candidate Rubalcaba may reconsider his career now that he is still on time. His estimated income of EUR1.4bn if wealth tax is re-introduced will get less chances to materialize than playing the Spanish Bono Lotto. Obviously, this electoral proposition may appeal to many voters, and it is a clear indication of the lack of direction in tax policies of the current government, the same that abolished this tax in 2008.
The government is also reportedly considering hiking income tax on the countries’ highest earners to generate a lesser sum, but it is anticipated that just one measure will be adopted. Set 2% higher, a change to the highest income tax band would generate around EUR1.2bn annually.
Spain has yet to implement decisive fiscal reform like other embattled European nations with political friction holding back consensus on the way forward for the nation. It is anticipated that comprehensive measures to consolidate the deficit will only be announced after elections are held in November. Hopefully, Mr Rubalcaba will not be in the new government.