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Spain's opposition leader urges business tax cuts
Fleshing out economic plans, Spain's opposition leader urges lower taxes on businesses
By The Associated Press

MADRID (AP) ' The leader of Spain's conservative party said Monday he would lower taxes on businesses to encourage entrepreneurs and chip away at a 21 percent jobless rate if elected prime minister as opinion polls suggest he will be.

Until now Mariano Rajoy of the Popular Party has been largely quiet on what economic steps he would take if he takes the helm after the general election on Nov. 20.

He said in a radio interview that among other measures he would lower taxes on small- and medium-size companies by five percentage points. Such firms make up the vast majority of Spanish companies.

He also said corporate profits that are used to create jobs would also be taxed at a lower rate.

However, he said he would leave personal income taxes and VAT ' a tax on sales or services ' as they stand for now, even though he criticized the current Socialist government for raising the latter a year ago as a deficit-cutting source of revenue.

Stimulating entrepreneurial spirit in a country struggling to post significant economic growth after nearly two years of recession is critical, Rajoy said.

"Either we create jobs, or we are going to have a big problem," said Rajoy, who lost both times he ran for prime minister in 2004 and 2008.

Rajoy also criticized a government plan to restore a wealth tax, describing the levy on a person's net worth as "nonsense." He also dismissed the government's claim that it could create 300,000 jobs as "falsifying reality."

In spite of his opposition, Rajoy did not say outright that he would eliminate the tax if elected.

Polls show Rajoy way out ahead of his Socialist rival, Alfredo Perez Rubalcaba and there are suggestions that his party is being cautious so as not to appear too confident of victory.

Rajoy said Spain faces more hard times even if the government changes hands after eight years of rule under Prime Minister Jose Luis Rodriguez Zapatero.

"Nobody has a magic wand," Rajoy said.

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