Spain's government wants wealth tax in the fight against the corona crisis

Deputy Prime Minister Pablo Iglesias has been demanding a tax on the rich for months

Photo: Rafael Marchante / REUTERS

Spain's left government relies on higher taxes for the rich to combat the consequences of the corona.

Prime Minister Pedro Sánchez and his coalition partner, Deputy Prime Minister Pablo Iglesias, announced higher taxes on Tuesday for large commercial companies and those with higher incomes.

This wealth tax should begin:

• with an annual income of 200,000 euros

• and assets from a value of ten million euros.

In return, more money should be made available for social tasks.

Especially Deputy Prime Minister Iglesias and his left-wing party Podemos had long campaigned for a tax on the rich.

In the draft budget for 2021, which provides for a cap on government spending to 196.1 billion euros without interest payments and social spending, 27 billion euros in non-repayable EU aid to cope with the corona crisis are also planned as revenue.

More money for healthcare

Sánchez said the draft budget should alleviate the particularly severe corona consequences in Spain, modernize the economy and strengthen the welfare state.

Iglesias added that the neoliberal times with spending cuts were over.

State aid for small and medium-sized companies and for the tourism industry, which has been particularly hard hit by the corona crisis, is expected to increase by 150 percent.

The increase in spending on health care should be the same.

In view of the high number of new corona infections, this is already reaching its capacity limit again.

The government estimates that Spain's economic output will collapse by more than eleven percent this year.

The state's debt is already at a record high.

The International Monetary Fund (IMF) estimates that Spain's deficit will amount to 14.1 percent of gross domestic product (GDP) this year.

For 2021, the government in Madrid hopes to be able to reduce this figure to 7.5 percent.

The EU Stability Pact, suspended due to Corona, provides for an upper limit of 3.0 percent.

Icon: The mirror

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