Spain plans tax hike for millionaires to help those in need

Category: Business


Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. welfare state / ˈwɛlˌfɛər steɪt / (n.) – a state in which government programs take care of the needs of the people by helping them pay for their basic needs like food, clothing, shelter, etc.

    Welfare states ensure that the poor will have their needs met, especially in times of crisis.

  2. measure / ˈmɛʒ ər / (n.) – an action or plan to achieve something

    The curfew is a measure to reduce crime in the community.

  3. alleviate / əˈli viˌeɪt / (v.) – to make something such as pain or a struggle less difficult or unpleasant

    The doctor gave me medicine to alleviate the pain.

  4. socialist / ˈsoʊ ʃə lɪst / (n.) – a person who supports socialism

    The socialists aim to reduce the hardships of the poor.

  5. spur / spɜr / (v.) – to cause something to happen or to speed up

    The government’s lack of action during the crisis spurred many protests.


Read the text below.

Spain’s Socialist-led coalition government is planning a temporary higher tax rate on the richest 1% of the country from next year, in addition to its windfall taxes on large energy companies and banks.

“We are proposing a redistribution of the effort, among those who have the most, to fund the welfare state, which is everybody’s,” Socialist Prime Minister Pedro Sánchez said in a speech.

Finance Minister María Jesús Montero says the measure targets only millionaires. The expected increase in tax revenue will be used to alleviate hardship brought by higher prices for energy and food, she says. The annual inflation rate climbed to 10.5% in Spain in August.

The exact increase and scope of the tax measure are still being worked out, the government says.

The Socialists’ junior coalition partner, Unidas Podemos (United We Can), is pushing for the new tax to be permanent.

The current top rate of income tax, for those earning more than 300,000 euros ($293,000) a year, is 47%. The highest capital gains tax is 26%.

However, regional governments have some leeway on taxation, and some of them run by the conservative Popular Party — the country’s main opposition party — have been cutting taxes, saying that step will spur growth.

A debate and vote by lawmakers on the government’s proposed windfall tax on companies is expected in the coming weeks.

This article was provided by The Associated Press.

Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • In his speech, Sanchez said that the government is “proposing a redistribution of the effort, among those who have the most, to fund the welfare state.” Do you agree with this move? Why or why not? Discuss.
  • Do you agree with Unidas Podemos that the higher tax rate for the richest 1% should be permanent? Why or why not? Discuss.

Discussion B

  • What do you think of the tax system in your country (ex. fair, too high)? Discuss.
  • Do you think anyone should be exempted from paying taxes? Why or why not? Discuss.