Beaming with friends, the turquoise-green federal government in the person of ÖVP club president August Wöginger, Finance Minister Magnus Brunner (ÖVP) and Green Party leader Sigrid Maurer announced that the Council of Ministers had decided on Wednesday to put an end to the cold progression and other measures against inflation. Brunner praised the move as a “sustainable measure, even though the Minister of Finance obviously lacks this budget.”
As already announced, this will provide additional relief for low and middle incomes next year. With the expansion of tax incentives for overtime, tax incentives for overtime will also arise.
Brunner: “Measures maintain purchasing power”
Brunner spoke in the press foyer on Wednesday about a “service package” and used the Progression Compensation Act resolution to once again praise the abolition of cold progression as “historic.” The measure also helped to maintain purchasing power in Austria, despite high inflation. Of course, the funds will be missing from the budget in the coming years, but it is an “act of honesty,” Brunner said. The use of the third variable would also set important priorities for performance, combat labor shortages and also reduce the burden on families with children.
Green Club leader Sigrid Maurer emphasized the social component of the measures. With the “social third” of the abolition of cold progression, low-income groups would clearly be relieved. Increasing the additional child contribution to 700 euros is important in the fight against child poverty.
Tax levels will be adjusted to inflation in the future
The cold progression as a gradual tax increase in the field of wage and income tax was abolished at the beginning of this year. Since then, tax brackets have been adjusted every year to reflect inflation, so taxpayers are no longer pushed into higher tax brackets due to annual wage increases. However, the adjustment of the tariff levels is only two-thirds automatic. The cabinet has now decided how the remaining additional income will be distributed next year.
The variable third will amount to almost 1.2 billion euros in 2024. Approximately 800 million euros of this will be repaid in installments in the first four tax brackets and the deductible amounts will be increased. The monthly compensation is increased to reward overtime. The basic profit deduction for self-employed people will increase. The allowances for dirt, hardship and danger allowances and the allowances for Sundays, public holidays and night work will also be increased. In addition, the home office arrangement for employees will be permanently extended. To ease the burden on families, the extra child benefit for low incomes will be increased from 550 euros to 700 euros. The law is expected to be passed by parliament in November.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
