The IMF recently told us one thing – to think about progressive taxation, but before that to cancel benefits, including for labor.

In addition, it seems that we will have progressive taxation, given the new statements of the PSD leader Marcel Čolaka and looking at how things look on the political scene today. It will probably exist sometime after 2024-2025.

No matter what I do, the words “progressive taxation” keep coming up. that’s not the problem.

They have destroyed the flat rate because of all the benefits they have introduced in recent years, so they are collecting less because many people are no longer paying. They have also introduced other facilities that have left the health care system underfunded, and now the “bailout” presented is a progressive tax.

Although they fooled IT experts and researchers with the “great tax revolution”, when they lowered the income tax to 10% and increased contributions, it did not help the budget.

Why

Because later they introduced much larger capacities, where hundreds of thousands of workers enter: construction, agriculture, food industry. In addition to income tax, employers do not pay for their health.

With the same gross, net matters to the workers

Basically, workers get higher wages due to lower taxes. The net amount matters. For example, with the same gross amount, a worker in the food industry earns more than a worker in the textile industry.

Thus, it is much easier for employers in the facilities sector to retain or attract people. Thus, certain professions, such as driver, salesman or accountant, earn more in an agricultural, food processing or construction enterprise than in another where there is no capacity.

• There are situations where a worker who knows how to operate a forklift may want to leave a worker in the alcoholic beverage industry, because in the food industry, for the same gross, he has a higher net. This is just an example. The same thing happens with accountants, for example.

In fact, a good solution would be to remove amenities and lower taxes for everyone. When some categories have amenities, others pay for them.

For example, a minimum wage cleaning company employee pays for health care to a construction worker who has a much higher net salary because he does not pay CASS. That is, the employer does not pay for him in CASS, but he is insured.

Liquidation of facilities is also available in the PNRR. Steps are not in this sense. The PSD-PNL-UDMD government focused on part-time workers, changes in micro-enterprises and alcohol excise when they came to Decree 16.

They forget other things or avoid them.

About how much the budget would bring the elimination of exceptions from work

We have made a calculation that shows us that objects in the work area (agriculture, food industry, construction, IT and research) amount to just over 10 billion lei per year, that is almost 1% of GDP (an amount that would be good) . for health care financing, for example). 737,000 workers are exempt from income tax and health contribution, and 135,000-145,000 have no income tax (IT and research).

There are few IT specialists (about 90,000 according to the Ministry of Finance), because the rest are in PFO and micro-enterprises. The liquidation of the object will not bring much money to the budget (according to our calculations, about 1 billion lei per year), but PNRR calls us to take measures in this direction.

If the facilities were liquidated, the government (politics in general), if it wanted to, could propose tax changes that would lower taxes for all workers in the economy. Minimum wage earners may have a higher net worth, for example.

However, the solution they want to implement seems to be a progressive tax. The problem is that if progressivity depends on wages and not on total income, then nothing is solved. People get rich not on salary, but on capital. Write this in any economics book, even those written by socialist economists like Piketty, who is commonly cited by every social democrat, and in some cases even by some so-called liberals.

If they will do progressive taxation, it remains to be seen how: whether it will be a global income tax with deductions, etc. For now, let’s look at the digitized Tax Office.

As we can see today, the problem is not in the single quota (10%), but in the fact that there are institutions, that is, hundreds of thousands of employees, for whom taxes and contributions are not paid, and from next year – changes in the sphere of micro-enterprises and PFA.

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