Bloomberg News

Rubalcaba Pledges to Impose Tax on Spain’s Rich, Fight Fraud

September 28, 2011

Sept. 28 (Bloomberg) -- Alfredo Perez Rubalcaba, the Socialists’ candidate for Spain’s general election, pledged to create levies on the wealthy and fight tax fraud as he aims to shield the welfare state from budget cuts.

Rubalcaba, the former deputy prime minister polls indicate will lose the Nov. 20 elections, said the levies would come on top of plans announced in July to tax “great fortunes” and banks.

“I’ve already spoken about two; there will be more sectors of society whom we ask to make an effort,” he said in a televised news conference in Madrid today. “I won’t touch salaries, but we may make some changes to income from capital.”

The ruling Socialists are trying to win back traditional allies angered by Prime Minister Jose Luis Rodriguez Zapatero’s moves to freeze pensions and cut public wages to rein in the euro region’s third-largest budget deficit. The election pits the People’s Party’s Mariano Rajoy, who seeks a slimmer state and help for entrepreneurs, against Rubalcaba’s vows to shield health and education from austerity.

Rubalcaba said the amounts raised from fighting tax evasion will be “striking,” without giving details. Spain’s underground economy is equivalent to about 19 percent of gross domestic product, compared with 25 percent in Greece and 22 percent in Italy, according to Friedrich Schneider, a professor at the University of Linz in Austria, who studies underground activity.

Rubalcaba, who also pledged not to freeze pensions again, is aiming to shrink the majority that polls indicate Rajoy is set to win. The PP may secure the largest outright majority on record, with as many as 189 seats in the 350-strong Parliament and a 14.6 percentage-point lead, El Periodico reported on Sept. 26. A poll commissioned by El Pais newspaper, a traditional ally of Socialist administrations, gave Rajoy a 14.1 percentage-point lead on Sept. 12.

--Editors: Leon Mangasarian, Jennifer Freedman.

To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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