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Call for higher asset charges in 'tax midget' Austria

Federal Trade Union (ÖGB) President Erich Foglar has branded Austria a "tax midget" concerning the taxation of labour.

Foglar said in a platform discussion organised by radio Ö1 in Vienna yesterday evening (Tues) he agreed with investor Josef Taus that taxes in Austria were too high – "but only regarding the tax burden on the factor labour."

Taus, who headed the People’s Party (ÖVP) before becoming one of Austria’s most powerful industrialists, warned from permanently raising taxes on assets. He said such a step would also negatively affect the country’s middle class. Taus also made aware of the high maximum tax rate.

Foglar made clear that he had a different point of view. The ÖGB boss agreed with Taus about high taxes but deplored inappropriate sums workers and employees must hand over to the taxman. He claimed Austria was a "taxation midget" when it comes to charges heaved on assets and real estate possessions.

Foglar once more appealed for an increase of the tax on assets. Organisation for Economic Co-operation and Development (OECD) research shows that Austria took in just 0.5 per cent with minor tax measures affecting private assets in 2008. The OECD members’ average tax on assets revenue was 1.8 per cent that year.

The Social Democrats (SPÖ) and the ÖVP agreed earlier this month that people earning 182,000 Euros before tax and more must pay higher income taxes in the coming five years. The SPÖ wanted to introduce a permanent increase while the ÖVP tried to avoid the creation of any kind of tax hikes or new taxation measures. SPÖ State Secretary Andreas Schieder said in a recent interview the measure could be extended depending on the development of the European economy.

SPÖ and ÖVP also agreed that farmers must not be spared from paying taxes on the purchase of agricultural fuel any longer. Another measure the government coalition partners want to introduce later this year is a 25 per cent tax on real estate sale profits.

Businesspeople, the Economy Chamber (WKO) and the Federation of Industries (IV) criticised the government for planning to fine firms which lay off staff. Representatives of the tourism industry are outraged that the charge will also affect hotels’ cancellation of seasonal employees’ contracts. SPÖ and ÖVP are bullish about the measure. The fine will also be charged in cases of mutual abandonment of contracts.

The Association of Austrian Hoteliers’ warned from a negative impact on the tourism industry. The sector is responsible for nearly 20 per cent of the gross domestic product (GDP). It is strongly depending on foreign workers who come to Austria for work only for the skiing holiday season or in summer.

Around 474,000 people were sacked or agreed with their employers on an end of their professional partnership in Austria in 2010. The SPÖ-ÖVP coalition hopes that the 110-Euro penalty reduces the number of enterprises which register employees with the Labour Market Service (AMS) for just a short period. Especially construction companies do so in winter. This means high bureaucratic costs for the AMS.

Vienna Times

Related articles: crisis

  1. EC warns debt-ridden Austria

    » General News 2012-05-31

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  2. Property prices keep climbing

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    A real estate expert has expressed concerns about property prices in Austria.

  3. Graz coalition collapses

    » General News 2012-05-31

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  4. FPÖ attacks Wrabetz

    » General News 2012-05-30

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  5. AUA under pressure as pilots quit

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  6. TV tax increase ahead

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