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No Leeway for Wage Tax Reduction

Published: August 27, 2012; 19:21 · (Vindobona)

Austrian social democrats call for a relief of medium-income earners. Finance Minister Maria Fekter opposes to this idea.

No Leeway for Wage Tax Reduction / Picture: © Flickr

Vienna´s mayor Michael Häupl (SPÖ) claims a tax cut for medium-income earners. The President of the Austrian Trade Unions (ÖGB) Erich Foglar supports Häupl. The next tax reform must focus on small and medium income earners, he says to the Austrian newspaper “Kurier”.

As the Austrian budgetary situation is already highly tensioned, a tax reform will not be possible before 2014, Finance Minister Fekter recently announced. “The era of government pork – particularly just before elections – is over. We have to proceed step-by-step to reduce our debt, because this is the only way we can ensure the future viability of the country and guarantee stability, security and a comfortable standard of living over the long term.”

As the budget needs to be balanced, Foglar suggested to introduce property taxes in order to finance a tax relief for small and medium-income earners. But also State Secretary Andreas Schieder (SPÖ) expressed his concerns. “In 2013, there is no leeway anymore.” Nevertheless, Schieder underlined to support Häupl´s idea. “A delay may be reasonable.” Schieder said.

Next year, Austria´s public debt level will increase up to 75% of GDP. Wifo´s econmist Margit Schratzenstaller underlines that the uncertainty has grown in Europe. A further sharpening of the crisis cannot be excluded, she said. “Tax cuts without a counterfinancing are not possible.”