Unidos Podemos plans tax hikes and greater public spending

Unidos Podemos, the alliance made up of the anti-austerity Podemos and the Communist-led United Left (IU) group, has revealed plans to increase the state’s revenues and reinvest it in social services.

Under these plans, tax authorities would collect an additional €10 billion – representing 1% of GDP – by the end of the next political term. A further €10 billion is expected to surface through a more efficient fight against tax fraud.

The tax hikes being considered by Pablo Iglesias and Alberto Garzón, leaders of Podemos and IU, respectively, would affect annual incomes of €60,000 and upwards. Taxpayers declaring more than €300,000 a year would be taxed at 55%.

Podemos considers that the time has come “to definitively abandon austerity policies”

Unidos Podemos is also planning to raise taxes on savings in order to collect a further €3 billion.

Corporate tax would rise, while VAT would be reduced by around €4 billion, particularly on basic household items.

On the employment front, the leftist group is promising a jobless rate of 11% four years from now, compared with the 14% contemplated by the conservative Popular Party (PP).

By 2019, there will be 20 million people in employment in Spain, according to Unidos Podemos.

Nacho Álvarez, the economy secretary for Podemos, said that the priority is to reduce the public deficit at a slower pace in order to reduce the jobless rate faster.

Podemos considers that the time has come “to definitively abandon austerity policies” by increasing spending – particularly in health and education, and by reducing the deficit at a slower pace. This would mean that Spain’s target of 3% of GDP would not be met until two years into a hypothetical Unidos Podemos administration.

English version by Susana Urra.