Zapatero mulls return of wealth tax before election

With less than three months to go before the November 20 general elections, the deficit-challenged Socialist government of Prime Minister José Luis Rodríguez Zapatero is considering reintroducing a wealth tax for the rich.

The Zapatero government in April 2008 abolished the tax levied on the value of net assets, arguing that it was unfair on the middle classes, who unlike the rich, were unable to find ways of getting around it.

The tax was abandoned before the full impact of the crisis about to hit Spain was evident to the government. Spain subsequently suffered its worst recession in decades, one of the legacies of which is the stranglehold of a public deficit that stood at 9.2 percent of GDP at the end of 2010 and which the government wants to trim to six percent this year.

In March of last year, Economy Minister Elena Salgado acknowledged it was a mistake to have abolished the tax, which brought in over two billion euros to the state's coffers in 2007.

Zapatero will not stand at the elections, and the Socialist candidate for prime minister, former Interior Minister Alfredo Pérez Rubalcaba, had already flagged his intention of restoring the wealth tax and reducing excessive salaries for top public officials in a country where a fifth of the workforce is unemployed.