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Socialists prepare to wage crusade against social spending cuts

Party leader Rubalcaba to push tax hikes for high earners

End predicted to "reaching out" to government

The Socialist Party is proposing higher taxes for Spain’s wealthiest individuals and corporations as an alternative to more spending cuts that affect Spaniards as a whole. Opposition leaders are also talking about a “social sustainability law” that would preserve some public services from the widespread cost-cutting aimed at bringing down the public deficit to meet EU criteria.

Socialist leader Alfredo Pérez Rubalcaba put these ideas on the table at his first federal committee as party secretary general; Sunday’s meeting also served to mark a new turn in the opposition’s attitude towards the conservative government of Mariano Rajoy, said sources who were present.

From now on, the PSOE will stop “reaching out” to the government and instead “build an enormous wall to defend the welfare state,” said Rubalcaba’s top aide, Elena Valenciano. “We still think that the country needs broad agreements, but we have no margin. They have let us know that they want no help, no agreements and no dialogue.”

The decision does away with the assertion that “lowering taxes is leftist,” as coined by the Socialists when they were in power during boom times. Now, Rubalcaba wants “an in-depth change” in the fiscal system to introduce a tax for the largest fortunes, more taxes for the Sicav instruments used by the wealthy to manage their money, limits to personal income deductions and a change to corporate tax, the same sources told EL PAÍS.

Rubalcaba also said that the likely bailout of Spain will be “Rajoy’s certificate of incompetence.”

Rubalcaba was the number-two man in the previous Socialist government that made significant spending cuts to keep the specter of a bailout at bay, something that is thought to have played a role in his defeat to Rajoy in last November’s elections.