IREF - Institute for Research in Economic and Fiscal issues
Fiscal competition and economic freedom
The Rajoy administration in Spain announced two months ago one of the largest tax increases in recent Spanish history. It aims to raise 6 billion euros ($7.9 billion) — along with a spending cut of nearly 9 billion euros ($11.8 billion). The measure mainly consists of a so-called solidarity surtax to come on top of tax rates on income and capital gains; it also includes an increase in real estate taxes.
The government announced the tax hike as "temporary" and "inevitable." In fact, the measure demonstrates nothing more than a lack of political will to cut excessive and unsustainable public spending. You can learn more about Spanish fiscal and economic situation from Cato’s Institute Economic Development Bulletin, February 2012.