The ÖVP’s tax plans, which were leaked before Chancellor Karl Nehammer’s speech, are currently causing controversial debates in domestic politics. While industry and business generally welcome any form of relief, worker representatives fear this will come at the expense of the welfare state.
A reduction in the input tax rate and additional wage costs, as well as a tax exemption for all overtime – the ÖVP will enter the election campaign with these proposals. The plans are not without controversy.
“Overwork makes people sick”
“As an employee, I do not benefit much if the welfare state has no money,” Sybille Pirklbauer, AK’s director of social policy, told “Krone”.
The tax exemption for overtime is also rejected. On the one hand, these are already fiscally privileged and on the other hand, they “make people sick”. “This is completely the wrong way.”
“We already have a large budget deficit”
Simon Loretz of the Economic Research Institute (Wifo) sees it the same way: “In principle, it is good if work is taxed less, but at the same time we need tax money. We already have a large budget deficit.” Broad tax relief – at least five million people in Austria benefit from the input tax reduction – “quickly costs a lot of money,” says Loretz.
However, for the economically liberal think tank Agenda Austria, the relief does not go far enough. Lower incomes would receive more relief and part-time work would be made even more attractive. “If the government wants to make full-time work more attractive, tax rates at the second and third rates must be reduced,” says economist Dénes Kucsera.
IV for reducing the tax and levy rate
For IV chairman Georg Knill, a reduction in tax and premium rates is urgently necessary because they are crucial for the location. “A reduction in tax and premium rates does not necessarily lead to a reduction in social benefits. Countries such as Iceland, the Netherlands but also many OECD countries such as Japan prove this and have significantly lower tax rates than Austria and a very well-developed welfare state. We also urgently need to get to 40 percent.”
“To curb the shortage of skilled workers and labor in Austria, we urgently need to increase the overall volume of labor; This requires many measures. This undoubtedly includes making full-time work more attractive or tax incentives for people who want to work longer. The tax exemption for overtime can also make an important contribution to this,” says Knill.
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.
