Ada Colau proposes a 2% tax on fortunes above €1 million to raise over €10 billion

The proposal

Ada Colau, the Frente Amplio candidate in the general election on 29 November, set out the plan on Thursday, 5 November, at a breakfast briefing organised by Nueva Economía Fórum in Madrid. Under the proposal, people with fortunes above €1 million would pay 2% of their total net worth each year, a rate that rises to 3% for fortunes above €50 million. La Razón gave the upper threshold as €20 million, so that discrepancy remains between the reports. Colau said the levy would raise more than €10,000 million to strengthen public services and to maintain and dignify pensions. She branded the idea 'tax the rich' and grounded it in a basic principle, as eldiario.es reported.

“There is no right to accumulate wealth, but there is a right to health, education and a dignified life.”

Corporate tax and banks

Colau also wants to raise the effective tax rate paid by large companies and banks, mainly by removing some tax breaks that reduce their bills. She said large firms and banks currently pay between 7% and 9% on their profits, while small and medium-sized companies pay between 19% and 20%. She put the banks' profit at €26,000 million up to September, and said the gap meant banks pay roughly half the rate that smaller firms pay. The ranges she cited are set out in the chart below.

Large companies and banks, low end7%

Large companies and banks, high end9%

SMEs, low end19%

SMEs, high end20%

Large companies and banks, low end

7 %

Large companies and banks, high end

9 %

SMEs, low end

19 %

SMEs, high end

20 %

Data from the article text

Housing and the levy on multi-owners

Colau presented a separate measure aimed at housing that would target owners of four or more homes, a group she tied to the richest 10% of the population. According to El Periódico, the levy would charge 10% of property value on multi-owners who speculate with rents. The aim, as she framed it, is to move about 500,000 homes now carrying what she called abusive rents into affordable rental, and she described the tax as a deterrent rather than a revenue source. El Periódico reported that the measure was announced in late October and that the charge could be avoided if rents fell by about 30%.

Clash with the Socialists

Colau used the breakfast to set Frente Amplio apart from the Socialist party (PSOE), accusing Pedro Sánchez of claiming credit for economic results delivered by Sumar ministers while failing on inequality in its own portfolios. She called Yolanda Díaz the best labour minister in the country's democratic history, crediting her with nearly 23 million people in work and unemployment below 4%. Ernest Urtasun, Pablo Bustinduy and Sira Rego attended as audience members. She reminded voters that Sánchez promised in April that this would be the housing legislature, and she said the record on housing fell short.

“Many things have been done well, but housing has not. And that has to be said. Housing is worse than ever.”

Colau framed the 29 November vote as a referendum on housing. The official campaign begins in about ten days.