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Spanish PM for higher taxes on the rich
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IANS/EFE | 27 May, 2010
Prime Minister Jose Luis Rodriguez Zapatero has said that his government will unveil "in the coming weeks" the details of a proposal to raise taxes on the wealthiest Spaniards, part of a wide-ranging austerity plan to trim deficits.
The idea is for those who have more to show "solidarity in this time of crisis", just as Spanish citizens as a whole are doing, the premier told the lower house of parliament Wednesday.
Last week, Zapatero's Cabinet approved a package of austerity measures that includes a 5 percent pay cut for public employees, a suspension of cost of living adjustments for most pensioners and an end to payments for the birth or adoption of a child.
The government says the measures will reduce public outlays by more than $18 billion during the 2010-11 period and help Spain meet the goal of reducing its budget deficit - now more than 11 percent of gross domestic product - to 3 percent of GDP by 2013.
Zapatero and his ministers have also announced cuts to their own salaries, and Spanish lawmakers, mayors and city councillors followed suit Tuesday.
In his remarks to lawmakers Wednesday, Zapatero also said the process of restructuring the country's savings banks "is very far along" and will be concluded by June 30.
Spain's savings banks are linked to the regional governments and have been battered by the collapse of the real estate market. One way to shore up those institutions is consolidation, such as the merger announced this week involving Caja Mediterraneo, Cajastur, Caja Extremadura and Caja Cantabria.
The merged savings bank will be the third-largest in the industry, with more than 135 billion euros ($165 billion) in assets.
While the prime minister promised moves to raise taxes on the rich, the small leftist faction in parliament put forward Wednesday a detailed proposal to boost annual government revenue by 8 billion euros ($9.8 billion) through increased levies on the wealthy.
The left's plan includes the introduction of a new, 50-percent income tax rate for people making more than 100,000 euros ($123,000) a year, as well as an increase in the top corporate tax rate to 35 percent.
Under the plan, a wealth tax for those with a net worth greater than 1 million euros would also be reinstituted.
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