Rubalcaba would raise 2.5 billion euros from tax on banks, rich

The Socialist candidate in the general elections due on November 20, Alfredo Pérez Rubalcaba, confirmed Monday that he will raise taxes in the banking sector and resurrect the wealth tax for the country's richest families with the hopes of raking in some 2.5 billion euros that will be allotted to creating jobs, especially for young people.

In an interview with SER radio, Rubalcaba estimated that the new wealth tax will bring in 1.4 billion euros annually with at least an additional 1 billion euros coming in from the tax hikes for financial institutions.

"We will spend the money to create jobs," the candidate confirmed without going into detail.

The wealth tax was abolished in 2008 by the current government of Prime Minister José Luis Rodríguez

Zapatero which argued that it was an unfair burden on the middle class who, unlike the country's wealthier citizens, could not find ways to get around it. The Cabinet has been studying raising the exemption to 1 million euros but hasn't made a final decision whether to present it before the November 20 general elections.

Rubalcaba will present his proposals for the hikes to the Socialist executive committee during its regular weekly meeting on Tuesday. The ruling party's committee is gearing up for its policy conference to be held between September 30 and October 2 when party members will begin drafting its election platform.

Meanwhile, Popular Party (PP) candidate Mariano Rajoy defended the cutbacks being taken by PP premiers in Castilla-La Mancha, the Balearics, Galicia and other regions, describing them as mechanisms to get the economies rolling again. Nevertheless, Rajoy said he didn't believe the reductions in spending are enough to help the regions emerge from the crisis. In a separate radio interview, the PP leader said Spain will need to restructure its economy as well as introduce additional reforms.

Last week, Castilla-La Mancha premier María Dolores de Cospedal announced drastic budget cuts amounting to some 1.85 billion euros, but said she would not raise taxes or cut back on social services.

The Socialists have charged that De Cospedal plans on firing thousands of public employees. In Murcia, PP leaders also said the will shave some 800 million euros in spending next year.

Rubalcaba, meanwhile, predicted that Spain will have "a very difficult autumn" because of the debt crisis. While he believes that the country isn't at risk, Rubalcaba said Spain will have to prepare itself "as anyone would who is awaiting a storm."