Cabinet to approve revival of wealth tax at end of week

The Cabinet on Friday plans to approve a decree re-imposing a tax on the wealthy as had been flagged by the head of the Socialist slate in forthcoming general elections, Alfredo Pérez Rubacalba, in an interview published on Sunday in EL PAÍS.

The government of Prime Minister José Luis Rodríguez Zapatero decided in 2008 to offer 100-percent tax breaks on the wealth tax without fully abolishing it. Since it still remains on the statute it can be easily revived by means of a decree. Zapatero is due to dissolve parliament on September 27 ahead of the general elections to be held on November 20.

Socialist Party sources said the government is likely to approve a threshold for paying the tax that will only impact the very wealthy, exempting the middle classes. The main reason the government gave for effectively removing the wealth tax was that it unfairly affected the middle classes rather than the rich who were more able to find means of avoiding it.

Rubalcaba asked for the tax to be reintroduced in the current legislature so that funds from it can be available from next year. The Socialists estimates the tax can added 1.4 billion euros to the state's coffers, funds the party wants used to create jobs for the young