During a deep economic recession in which almost one in five Spaniards are unemployed, the government's measure will raise taxes for foreigners who arrive from 2010 onwards and earn above 600,000 euros a year to 43 percent from 24.
It would amend the so-called "Beckham Law," named after the England midfielder and former Real Madrid player, which was approved in 2002 to make hiring foreign high-earners easier and Spain more attractive to the specially qualified or skilled.
The measure, which will be implemented on January 1 2010, will not affect players already in Spain such as Real's Ronaldo and Kaka or Barcelona's Zlatan Ibrahimovic and Lionel Messi.
LFP president Jose Luis Astiazaran told TV channel Telecinco on Wednesday the league would meet on Friday to decide what measures to adopt, with a strike among the options.
"This is a special tax regime which has allowed star players to join our league which benefits both the fans and the public coffers," he said.
DAMAGING MOVE
The spat in Spain is similar to one raging in France, where a row has broken out among government ministers about scrapping a tax break for top athletes.
Barcelona president Joan Laporta also condemned the Spanish government's move and said they should have consulted those affected more thoroughly before acting.
"This measure damages Spanish soccer," he said on the European champions' website.
"It would mean that talented players will think twice before coming to our league."
Smaller clubs that lacked the earning power of Barca and Real would be the most affected, Laporta added.
The ruling Socialist party's spokesman in parliament, Jose Antonio Alonso, said the change in the law was simply an attempt to level the playing field in difficult times.
"(This is) an exercise in tax justice, aimed at promoting tax equality at a time of serious economic crisis," he told Telecinco. "Foreign footballers... have to pay their taxes just like everyone else."
