In fact, Spain’s wealth tax has existed in its current form since 1978. Today, it ignites passionate arguments on both sides as the country tries to chart a course for its future economy. The aim of this new tax would be to more fairly redistribute U.S. wealth among the American people. In particular, it aims at Spain’s richest, such as Amancio Ortega, founder of Zara, Spain’s richest man. Ortega will draw a massive €3.1 billion dividend from Inditex, Zara’s parent company. This payout is a stark reminder of the concentrated wealth that the new tax aims to address.
Spain’s wealth tax is an example of a tax designed to target rich people with lots of net worth. It begins at 1.7% for persons with assets above €3 million and increases to a 3.5% rate for fortunes over €10 million. Arguably, allowances exempt the first €700,000 of an individual’s wealth, plus another €300,000 for their principal residence. Even taking these steps, estimates indicate that nearly 80% of the wealth held by Spain’s super-wealthy 1% go untaxed. That raises major concerns about how successful the wealth tax really is at accomplishing its stated goals.
Wealth Tax Structure and Impact
Spain’s wealth tax brings in around €2 billion a year, dwarfed by the €130 billion raised by income taxes. This is a significant difference and raises questions as to whether this wealth tax is a sustainable contribution to bolstering public finances. While there are wealth taxes in other countries, the French wealth tax is unique in Europe. In fact, Spain is one of only three countries—together with Switzerland and Norway—where the usage-based levy is still imposed.
The tax’s impact varies significantly across regions. In Galicia, where Ortega is a long-time resident for tax purposes, people pay a wealth-tax 50% discount. By contrast, Andalucía, a region ruled by conservative leaders, got rid of its wealth tax rate altogether in 2022. Madrid’s regional leader has proposed a 0% tax rate, calling the region a “paradise” for taxpayers.
“Andalucíans: welcome to paradise.” – Madrid’s regional leader Idiaz Ayuso
As states and cities hit each other against tax breaks and subsidies go, we fuel this race to the bottom. Not only can these measures weaken national revenue-raising initiatives, they likely won’t have much effect on whether rich people decide to move.
Wealthy Individuals’ Response
Anecdotal evidence suggests that very few rich Spaniards have left the country since the introduction of the wealth tax. Rather than jumping ship, they doubled down on their mission and worked to change the financial calculus. Marc Debois noted that “The big fortunes mostly stayed put, filed protective appeals, and hired better structuring teams.” Many other high-net-worth individuals have already relocated to Lisbon and Dubai to reap similar benefits. Their ranks remain modest—large enough to draw headlines, but not enough to catalyze a stampede.
“A handful decamped to Lisbon or Dubai or any other location; enough for newspaper headlines, not enough for a flight.” – Marc Debois
This response suggests that while there are better tax environments elsewhere, many wealthy Spaniards see value in remaining in Spain and managing their financial obligations within the current system.
Public Opinion and Future Prospects
Public opinion around Spain’s wealth tax is incredibly positive. Advocates praise it as one of their most crucial tools in the fight for a more equitable distribution of our nation’s wealth among its citizens. Susana Ruiz emphasized the potential for increased revenue from this tax system: “We could be raising at least two to three times more than we are at the moment.” First, she said, citizen support for the wealth tax is off the charts—like 80 percent favorability strong. This support is crucial to ensuring fiscal fairness is seen as an important principle of any fiscal system.
“There is a lot of citizen support behind it. It helps in the perception that the system is fair.” – Susana Ruiz
Though it faces significant hurdles, advocates of the wealth tax insist that it is crucial for tackling economic disparities in Spain. They contend that without these checks and balances, the growing concentration of wealth may give rise to a political influence far out of proportion to a small elite’s numbers.