• Fri. Jun 14th, 2024

Spain introduces wealth taxes to secure health care & welfare state

ByThe Rise Insight

Jan 10, 2021

The progressive government in Spain is introducing wealth taxes. The Corona pandemic of 2020 hits Spain harder than almost any other country. In order to maintain the health care system and the welfare state, the government is now increasing the taxes paid by the super-rich and large companies.

Spain is particularly badly affected by the Corona pandemic. More than one million Spanish people have already become infected with the virus in 2020, and almost 35,000 have died of it. Hospitals are reaching the limits of their capacity. Therefore, the country has recently declared a health emergency again.

The economic consequences of the Corona crisis are also affecting the population in Spain: the unemployment rate rose to over 16 percent in the summer, and the GDP is expected to collapse by 11.2 percentage points in 2020.

Left-wing government announces taxes for super-rich and large corporations

To combat the crisis, the Spanish government is now focusing on higher taxes for super-rich and large companies. The government, made up of the social democratic PSOE and the left-wing Party Podemos, has announced the introduction of taxes on the rich.

Large companies will have to pay more through an increase in corporate income tax, the tax on corporate profits. For the super-rich, the income tax will be raised: they are to pay a wealth tax on annual incomes of 200,000 euros or more. Large fortunes will also help to finance the Corona crisis. Private assets will be taxed from a value of 10 million euros.

Wealth tax to secure Spain’s welfare state

The Spanish government under Prime Minister Pedro Sánchez wants to use the additional revenues for the welfare state. The Corona pandemic  of 2020 has put the welfare state in financial trouble. The new wealth taxes will help to finance the strained health care system. 150 percent more healthcare expenditure is planned for this purpose. There are also plans to provide financial assistance to small and medium-sized enterprises in order to secure jobs.

Only four European Countries have a wealth tax

Today, only four European countries have a wealth tax: Spain, Norway, Switzerland, and Belgium. Meanwhile, the OECD countries collect an average of 5.6 percent of their taxes from wealth. In Great B

By The Rise Insight

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