The Spanish government of Pedro Sanchez has said that they will be raising taxes and the super-rich will be targeted. Cash is running low after massive expenditure during the coronavirus lockdown. With the majority of Spanish companies feeling the economic pinch, the government desperately needs cash...and it will be the rich who will be footing the bill...at least is the theory.
The Spanish economy is already in desperate trouble and there is a fear that by raising taxes the government could extinguish the economic recovery; if households have less to spend then everyone will suffer. The Balearic government is desperate to find new sources of revenue, despite widespread opposition the government decided to retain the tourist tax this year...quite simply because they needed the cash.
Tourism is one of the main engines of the Spanish economy and already summer´2020 is being dismissed as a season to forget. It must also be remembered that the Spanish government has approved plans to raise the minimum wage and all this will cost a fortune. Sanchez is going to have to rethink his economic plan if he wants Spain to get moving again. There are some hard decisions to be made and spending cuts can be expected but not in the health service.
The coronavirus has hit the Spanish economy hard because of its reliance on tourism, fewer visitors means less money. Balancing the books in these coronavirus hard times will be no easy task.