Taxing times

TAX the rich, said one of the world´s richest men, Warren Buffett , and it appears that new Prime Minister Mariano Rajoy has listened to his advice. The big earners and the wealthy will see their tax bill rise substantially as the Spanish government intends to raise six billion euros thanks to the tax hike. Taxing the rich is probably one of the easiest and more popular ways of raising money but the move has always been opposed by British Prime Minister David Cameron. It appears that his fellow Conservatives in Europe think differently. But six billion euros will not solve Spain´s debt mountain and its huge budget deficit. Rajoy also announced yesterday that civil servants will see their pay frozen for next year and also there will be major public spending cuts. But it will be the tax on the rich which will make the headlines and there is no shortage of wealth in Spain. Over the last few years many of the wealthy in Spain have been moving out and buying property in London and other European capitals. Perhaps they realised that they would be in the spending spotlight as soon as Rajoy was elected. As one Spanish minister said yesterday this is the beginning of the beginning to get Spain back on track. Rajoy is going to face numerous challenges in the New Year with the Spanish economy back in recession and there is a fear that unemployment could even rise further. But he appears to be on the right track and let us hope that he is successful.