More net from gross

No new taxes and levies!

(Bild: Krone KREATIV/APA/Baraba Gindl)

Almost nowhere else does the state reach so deep into the pockets of its citizens as in Austria. It is high time for more net from gross.

Taxes are always a hot topic before elections: while SPÖ politicians call for new levies on inheritances and assets, middle-class and right-wing parties clearly reject new taxes and promise reductions. What happens after the election is usually a completely different matter anyway.

In any case, over 80 percent of citizens are against new burdens, as shown by many reader and user comments and our survey. 64% fear that this would jeopardize prosperity. One wish is central: more net from gross!

82 percent

of the population are against new taxes.

Because Austria is a high-tax country. "There is hardly any other state apparatus that taxes its citizens as heavily as Austria," says Franz Schellhorn, Director of Agenda Austria. With a tax rate of 43.6 percent, our country is among the leaders. Only in Belgium, France and Denmark is the rate higher.

The tax burden hits the working population particularly hard. A large proportion of an average income goes to the tax authorities. Social security contributions and income tax eat up a lot. An employee earning around 43,000 euros therefore costs the employer over 77,000 euros.

"If you can do the math, you work part-time"
This means that the finance minister is the main beneficiary of a salary increase. The fact that Austria has a progressive tax system also has a disadvantage: "If average earners double their working hours from 20 to 40 hours per week, they do not earn 100 percent more net, but only 68 percent more. If you can do the math, you work part-time," says Schellhorn.

The abolition of cold progression has not changed this problem, because it only adjusts the tax brackets to inflation, the tax system has not changed structurally.

(Bild: Krone KREATIV/Stock Adobe)

As our country taxes labor so heavily, Andreas Babler (SPÖ) is now calling for wealth and inheritance taxes. The wealth tax was abolished by the Social Democrats because it didn't achieve very much, but as a political catchphrase it is always good. A wealth tax tends to drive away wealth and hits the middle class, which is not mobile. As Italy has shown, there are more intelligent systems to create incentives to keep assets in the country and benefit from them as a state. "It's no coincidence that no country in the world collects substantial parts of its tax revenue through wealth-related taxes," says the Agenda Austria boss.

Expenditure is the problem, not revenue
However, supporters emphasize that taxes on work could be reduced in return. According to Schellhorn, Babler and Co. are making a false assumption here: "They are pretending that the state has a revenue problem. But we actually have a spending problem." The state should not solve problems by throwing more and more money at them. The population agrees. A clear majority is convinced that politicians do not need to invent new taxes in order to fulfill their tasks. Efficient spending is required. With more austerity, reductions are feasible despite the high deficit of 17 billion euros this year. But this is not very popular. "Everyone wants to cut taxes before the elections. But nobody wants to restructure the shattered state budget," says Schellhorn, who is calling for a brake on spending.

"Capital gains tax is a bad joke for small savers"
Schellhorn also takes aim at the capital gains tax (KESt). This has been 25 percent since the 1990s. Incidentally, a red finance minister introduced it in return for the abolition of wealth tax. Schellhorn: "The state is burdening its small savers with a capital gains tax every year, even though they lose money in real terms after deducting inflation."