Unidas Podemos proposes new tax on large fortunes for coronavirus recovery effort

Spain’s anti-austerity party Unidas Podemos will on Tuesday propose a new tax on the country’s greatest fortunes in a bid to raise €11 billion for the coronavirus recovery effort, according to sources from the party. The proposal will be presented at the newly created congressional Committee for Social and Economic Reconstruction of Spain, which is aimed at planning the future of the country after the coronavirus crisis.

The idea for the tax was first mentioned by the leader of Unidas Podemos, Pablo Iglesias, last Friday at a meeting of the party leadership. Iglesias, who is also one of Spain’s four deputy prime ministers, reportedly said: “There is consensus that instruments like a tax for reconstruction are needed so that those who have the most can pitch in, providing resources to the public coffers.”

It’s fair that those who have the most should contribute in a special way to sustain those who have been most affected by the crisis

Unidas Podemos sources

The party has estimated that the new tax will raise €11 billion, or 1% of Spain’s GDP, which is the equivalent of a third of Spain’s deficit in 2019, and more than double what the government spent on health last year.

The new levy would replace the current wealth tax. Sources from Unidas Podemos explained that the proposal would affect “fortunes of more than €1 million, in a progressive fashion, so that the largest part of the tax would fall on the highest 1,000 fortunes.”

The scale would begin with a 2% tax on net fortunes of €1 million or higher, and then progressively increase according to the amount of wealth – 2.5% from €10 million, 3% from €50 million, and 3.5% from €100 million. “It’s fair that those who have the most should contribute in a special way to sustain those who have been most affected by the crisis,” explained the same party sources.

Unidas Podemos entered government for the first time in 2020 after reaching a governing deal with the Socialist Party (PSOE). The tax on large fortunes, however, was not included in this deal, which was struck after the inconclusive results of last year’s election. Nor had the government made any mention of such a tax until now. Despite this, Iglesias, through Unidas Podemos, has been increasing the pressure for the new tax to be included in the debate on how to address the financial fallout of the coronavirus crisis.

Podemos was born from the so-called “Indignados” citizen movement that sprang up in 2011, in protest at Spain’s two-party political system (PSOE and the conservative Popular Party) and politicians’ handling of the economic crisis, and to demand greater democratic rights for citizens. The party later merged with the United Left to become Unidas Podemos.

English version by Melissa Kitson.