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Spain's tax revolution with carrots

Thursday, September 27 08:47:55

To avoid an increase in the value-added tax that the Rajoy government put into force on Sept. 1, a municipal theater in Bescano, a Catalan village, has found an innovative loophole: sell carrots in lieu of entrance tickets. Carrots are among the staple foods exempt from the tax increase, so the Bescano theater is selling them for 13 to 15 euros each, or $17 to $19. Each carrot entitles the bearer to see a play in November. Quim Marce, director of the Bescano theater, said: "The theater world was already in very bad shape, but this tax increase will basically kill off small theaters like ours. We're perhaps pioneers, but I really think that other theaters will have to follow our example and find ways around this unsustainable tax."

Investors have already shown renewed doubts, demanding sharply higher interest rates to hold Spanish government debt. On Wednesday, the interest rate on Spain's 10-year bonds approached 6 percent for the first time in months, while European shares and the euro fell sharply as investors reacted to social turmoil in Spain and Greece. The Rajoy government plans to present a draft budget for 2013 today that is aimed at reducing Spain's deficit to 4.5 percent of gross domestic product in 2013, from a target of 6.3 percent this year. But hitting either target depends on higher tax revenue even as unemployment and recession are sending protesters into the streets and prompting a political revolt in some of the country's largest regions.