Socialists press Rubalcaba to champion wealth tax

Socialist candidate Alfredo Pérez Rubalcaba is worried voters may try to link the proposed constitutional reform to cap public spending with the current government's flirtation with the idea of reviving a wealth tax for the rich.

During the weekly meeting of the Socialist bench on Monday, Rubalcaba told his party's lawmakers that he didn't want the two issues to be confused. Many Socialist congressional deputies, such as José Antonio Pérez Tapias, Jesús Membrado, Manuel de la Rocha and Rafael Simancas, urged Rubalcaba to support the urgent approval of a wealth tax that would affect Spain's biggest fortunes and not hurt the middle class.

Last month, the Cabinet began studying whether to re-introduce the tax after Prime Minister José Luis Rodríguez Zapatero abolished it in April 2008, arguing it was an unfair burden on the middle class who, unlike the country's wealthier citizens, could not find ways to get around it.

Time for debate

"It is time for a debate over taxation in this country because many want a welfare state akin to that of Sweden while paying a Slovenian tax rate," Rubalcaba told his party. "But I don't want to introduce this debate at this time."

Still, many Socialists reminded Rubalcaba that "in France, Germany and in the United States, the debate in favor of taxing the wealthiest citizens has been won." Others say the wealth tax proposal is giving "Mariano Rajoy an electoral argument" and insist instead on launching a counterattack by "proposing policies that give priority to economic growth to create jobs, promote social unity and introduce a gradual but progressive tax system."

Among the proposals being studied by the Cabinet is to raise the exemption to 1 million euros per taxpayer, which would affect a lesser number of people than the previous version of the wealth tax. During 2007, the last year that it was in effect, one million people paid more than 2.1 billion euros.

Under the plan the Cabinet is studying, 90 percent of those who paid the wealth tax in 2007 will now be exempt. However, the revenue from the tax would only drop by 50 percent, according to the experts. In 2007, 25 percent of those who were covered by the wealth tax - some 250,000 taxpayers - paid 70 percent, or some 1.4 billion euros, of what was collected that year, according to the Spanish tax agency AEAT.