Talking about the lack of alternatives is a brainstorm, because every major choice has a series of smaller ones, and they all speak to some values and choices: who taxes the first, who will leave them. At this time, it is likely that people with lower incomes will again be hit harder by tax increases.
As expected, Finance Minister Jürgen Ligi announced on ETV that the strong financial position of the country is very important. But what about the financial status of the people who make up this country? Who in the government will stand up for the financial situation of the people of Estonia, which has worsened and will continue to worsen due to taxes and price increases?
If something is being talked about, for example the good financial condition of the country, what is really not being talked about? If the state does not have the money to implement one thing or another, where does the assumption come from that the citizens and taxpayers certainly have it?
It is true that the coalition agreement says that the so-called tax cap will be abolished in 2026 and, as if by agreement, for the minimum rate without income tax to increase to 700 euro to make the long term Reform Party. promise a gift to the wealthiest members of society to come true. Its price has been estimated again at 500 million euros.
It is clear that such a solution is in the interest of the richest rather than the low paid, although it is also clear that the middle class has lost a lot from price increases and will lose more with another tax increase.
By going deeper into the coalition agreement, it will be clear that the Reform Party has proven once again that they are capable with a tax increase called the security tax. Because people who are inevitably worried about security will not ask too many uncomfortable questions about this tax to avoid accusations of indifference.
However, taxes from the first euro hit people with lower incomes the hardest, as they are the closest to the standard of living and each euro is relatively more expensive.
The disregard with which the entire deal was made and the livelihoods of people with lower incomes were sacrificed is amazing. The chairman of the Social Democratic Party, Lauri Läänemets, in his comment to Äripää, said that he did not know the information related to the increase in income tax and asked the Minister of Finance to examine the plans in more detail tax, admitting that. , taxes from the first euro “probably agreed to a lot”.
In words, it is the social democrats who have spoken strongly about how they stand for people with lower incomes in society. Unfortunately, when ministerial appointments came in, these principles remained unprotected. In fact, one more ministerial post was created for their party. If the climate minister also managed infrastructure, now we have a separate infrastructure minister with a team, and the administration area of the once influential economy minister has been completely taken over by inconceivable meaning. In other words, instead of creating a systematic and economic state apparatus, there is an art of political negotiations.
A country with already high price levels will face new tax increases and with them new price increases. Therefore, the vision offered by the new government does not offer any solution to Estonia’s economic problems. The work to restore economic growth is at the back.
First, it must be noted that by taxing more, you cannot necessarily hope for more tax revenue, because jobs will not be created, reserves will not be created , the recovery of economic growth will be delayed and income will be hidden. it will also increase. The practice of many countries shows that by reducing taxes instead, revenue will improve.
The collective political compromise will now take with a spoon and take with a spoon. According to the plan of the Reform Party, the income tax will be increased to 22 percent next year, and all those people, including pensioners, who have a monthly income of up to 654 euros per month free from it.
But the increase in income tax, known as the security tax, will affect everyone, so every pensioner and every household with a very low wage, because it applies from first euro, without minimum income tax.
Annely Akkermann, the chairman of the Finance Committee of the Riigikogu, is right in one way when she said that the rich in addition to their daily expenses did not take into account the income tax increase, which is going to security fee. But, as is typical of Reform Party politicians, he is wrong about the second part of the statement, that not even a poor person on low wages or an elderly person is forced to work to make ends meet. meeting with a low pension noticing him. Ads, and how else.
There are 65,000 low-income households in Estonia, and as the economy slows down, the number of low-income people tends to increase. If each of them pays a little more than 13 euros per month from their income, the state earns 850,000 euros from people in the most difficult financial situation with this decision. With this amount, these families get less food on the table or less clothing or interest education for their children.
Of course, we should not forget for a moment that the VAT will also increase, which will inevitably lead to an increase in the cost of living. Every product and service becomes more expensive, even every carton of milk in the shop.
The Center Party has again proposed the introduction of a temporary bank levy to improve the state’s financial situation and to stop the abolition of the tax moratorium. There is no need to even discuss whether a bank fee is possible and fair and profitable. It was founded in Lithuania, and the country of Lithuania has overtaken Estonia in terms of its economic well-being. However, the price tag for eliminating the tax loophole has long been particularly calculated.
The coalition agreement that guides our Estonian life comes from where there is nothing left to give, from the weakest. Under the guise of security, a Trojan horse was pushed into these people’s wallets. But such an increase in the tax burden can worsen our social cohesion, and then we already have security concerns.
