The Austrian trade union confederation – ÖGB – is running a campaign for easing the tax burden on workers and employees based at www.lohnsteuer-runter.at The campaign is still ongoing and so far we are quite successful. Over 700.000 people have already …
The Austrian trade union confederation – ÖGB – is running a campaign for easing the tax burden on workers and employees based at www.lohnsteuer-runter.at
The campaign is still ongoing and so far we are quite successful. Over 700.000 people have already signed our petition (this is getting close to 10 percent of Austria’s population).
In 2014, for the first time in Austria’s history, revenues from income tax will bring in more cash than those from VAT. The effects of ‘fiscal drag’ mean that too little remains of the good wage and salary increases that we fight for year after year. The ÖGB (the Austrian Trade Union Federation) is therefore campaigning for a reduction in income tax – for more of the gross pay to work its way through to net pay.
The urgent need for an orderly reduction in taxes is apparent from the thousands of signatures that the ÖGB has collected since the start of the campaign.
Cut income tax – raise net wages
A major imbalance is evident in the Austrian tax system. Work is taxed far too highly, capital not nearly enough. Not only do we feel this, but the EU Commission and the OECD say it as well. Employees are bearing an ever greater share on the tax burden. State revenues from income tax are rising sharply. By contrast, corporation tax and corporate income tax on public and limited companies are increasing at a rather more leisurely pace. Why this imbalance? Every time wages are increased, an employee’s tax rate goes up – and from that handsome increase in gross pay, the net result is then only one that at best, cancels out inflation.
The ÖGB, therefore, wants a substantial reduction in taxes on all workers and employees. In addition, reform of the overall tax structure is required in order to bring greater fairness into the domestic tax system. The tax burden on work has to be reduced! In 2012, the average tax rate on work in Austria was 41.5% – the third highest level in the whole of the EU and well above the EU average of 36.1%. And while Austrian taxes on work are way above average, workers on low and medium incomes are particularly hard hit. The starting tax rate of 36.5% (on annual income of EUR 11,000 and upwards) is far too high, especially in comparison with corporation tax and capital gains tax with a flat rate of 25% – regardless of the tax base!
Creating fairness in taxation
In Austria there is a glaring inequity between the tax burden that we as workers and employees have to bear and the taxation of capital. Where taxes on capital are concerned, Austria trails behind much of the industrialised world. This imbalance is not only unfair, it is also damaging the economy: less money means lower income for business. Austria is one of just a handful of countries in Europe that manages to do without inheritance and capital transfer taxes.
Across Austria, thousands of union members are collecting signatures for the ÖGB’s ‘Cut income tax’ campaign – at work, among family and friends, at the pub and in social clubs. Every day, ÖGB receives hundreds of pages of fresh signatures. Works council members and the unions are thus sending out a strong collective signal and lending further emphasis to demands for an income tax reduction. A survey conducted by opinion research institute IFES has shown that nine out of ten Austrians welcome the ÖGB cross-party initiative and support its clear demand to the government: ‘Cut income tax – and quickly!’
Every signature counts
As many signatures as possible are needed if the necessary tax reductions are to be achieved. Every ‘like’, every ‘recommendation’ to colleagues, friends and acquaintances, and every single signature brings us closer to that goal. Let’s send a strong collective signal with our signatures – to make sure that in 2015, more of the net cash is available to us!
Stop fiscal drag
Fiscal drag is the additional tax burden that arises in a progressive tax system when the tax thresholds are not adjusted in line with inflation. In this situation, rises in income that simply match the inflation rate will lead to an increase in the tax burden, even though real income (that is, purchasing power) has not gone up. Specifically, the problem arises when income moves into a higher tax bracket. Fiscal drag would be eliminated if tax thresholds were to rise automatically by the rate of inflation.
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