For several years, Romania has been struggling more and more helplessly in the logic of a bankrupt budget. On both the revenue and expenditure side, a growing number of exceptions to the rules are on the verge of plunging Romania into unstoppable fiscal chaos. The first observation is that exceptions to the rules are no longer exceptions at all, and once granted they become perpetual.

The most relevant example is related to the exemption from paying taxes and fees that employees have. IT&C workers were the first to receive income tax exemptions. At a time when the payroll tax has risen to 40% and the gap between incomes in Romania and in more developed countries is enormous, the Romanian government has come to the conclusion that if it does not do something to reduce this gap, we risk in a few years all the staff IT&C to emigrate to other countries.

This event actually opened a Pandora’s box, and I personally expressed my doubts several times about the balance of advantages and disadvantages in this case. However, over time, the positive results have been surprisingly broad. The IT&C sector employs more and more people, especially in Bucharest, Cluj, Timisoara, Iași and other university centers of the country, the respective industry plays an increasingly prominent role both in the growth of Romania’s GDP and exports, and in the indirect effects caused by the significantly higher incomes of those , who works in the field. It is no less true that the general development of Romania after joining the European Union has led to an improvement in the standard of living and the creation of much more favorable conditions, including for spending free time, which has reduced the pressure that creates the risk that the best IT – want to leave countries.

However, it should be noted that the effective benefit of not paying payroll tax has fallen from a high 40% at the beginning to less than 6.5% today (because IT workers regularly pay social security contributions and income tax is calculated after they are deducted. Other in other words, the payroll tax is less than 6.5% of gross pay!) However, the very discussion of eliminating this tax break, however small it remains, is met with fierce resistance, both from those who benefit from it and , oddly enough, by some who don’t really understand what’s going on, but have the impression that it’s “good” to be with “the people”. On objective analysis, we will find that this privilege is more of an illusion than a significant benefit, but the flip side of the coin is that it is granted to some of the best paid workers in Romania; this is morally incomprehensible and economically absurd.

In recent years, from the Pandora’s box opened more than 20 years ago for the benefit of IT specialists, new and new social and professional categories have begun to appear, which already number several hundred thousand workers who do not pay payroll tax, and some do not even pay contributions for medical care. . Yes, workers in construction and construction services, production of construction equipment and materials, agriculture and food industry, as well as workers in research and development work – all of them do not pay income tax. As if this madness was not enough, it also extended to social contributions, which were canceled for workers in construction, construction services and the production of construction equipment and materials, as well as in agriculture and the food industry. Therefore, it is not enough that health care is seriously underfunded; the legislator found a way to deepen the gap when some users of medical services receive them for free at the expense of others.

The topic of tax benefits, which are used by some employees, is increasingly being discussed publicly, with arguments from one side and the other. I heard, perhaps, frankly funny: right now, when there is a threat of recession, should someone cancel tax breaks? As expected, we’re driving with the handbrake on, but instead of letting off the brakes, it’s better to hit the accelerator, because we may be going like this for a while. As I hear arguments like: “it is important to ensure our food independence” or “it is necessary to support housing construction.” However, this approach will lead nowhere.

Far less debated are the profound implications of maintaining such privileges. And the list is really significant. First, the creation of privileged castes seriously affects social cohesion: some are far more equal than others, as Orwell presciently put it in Animal Farm. The very national feeling is in danger as long as some have more or less financial privileges. Instead of a healthy competition for better personal results, the effort shifts to obtaining a position that offers financial privileges: more welfare for less work.

Second, as Pandora’s box opens, more and more people appear who want their group to have access to these privileges. Wouldn’t doctors be very important too? What about the drivers? Metro workers? The list is endless, and we will find arguments with the duium – especially since nowadays these privileges are given absolutely chaotically, who had more political power. In the case of the ITishniks, at first it was possible to talk about the risk of many leaving; now, 20 years later, that risk is much less, but the privilege remains.

Thirdly, an extremely pernicious mentality has been created: if something goes wrong, there is nothing easier than a new tax break granted forever. The other day, a friend who works in another country responded to my Facebook post like this: “I work in – as they say in Romania – IT, but in a country with taxes (and hot water) and I leave about half of my income on commission and taxes. I really found it hallucinatory that in Romania exactly the segment that earns the most is exempt from income tax. This is how it looks from the outside – an inexplicable anomaly.” With us, however, the anomaly tends to become the rule. Very dangerous!

In the revenue part of the budget, we have many other holes in the cheese – solutions for perfectly legal tax evasion. The fundamental problem here is that taxes are set based on how you earn, not how much you earn. So we have hundreds of thousands of self-employed people, one-employee businesses, micro-enterprises, all created with the exact goal of paying far less tax. A final and radical solution would be to move from how to how much you earn, and have taxes calculated and paid according to that criterion. Yes, it is quite complicated, there are many and very powerful people who make huge money from “tax optimization” – deliberately left as a possibility in the legislation. But the gains for society and the economy would be simply immeasurable if politicians would open their eyes.

Add to this legislation the principle that “an uncaught thief is an honest trader and a caught thief pays like an honest one” (checking amounts that cannot be justified) and the fact that there is no tax liability on amounts “parked” through tax havens and so we really have a sizeable fiscal debt in the area of ​​income tax.

From benefits for non-payment of certain taxes, I will move on to income benefits that the state pays insanely generously to some categories of super-citizens: special pensions. And here the beginning was quite modest: they retired a little earlier and with a little more money for aviation and diplomatic personnel, in addition to the personnel military. In the beginning, the benefits were relatively modest, both in terms of retirement age and the way the pension was calculated. However, in recent years the situation has become absurd and seems to have gotten completely out of control. We have pensioners for 40 years, there are pensioners with pensions of tens of thousands of euros per month. And, of course, the list of categories of special pensioners is updated every year.

There are absolutely no such privileges anywhere in the civilized world. And the main reason, in my opinion, is not budget costs (although in Romania they also tend to be huge!), but the destruction of social cohesion. A normal country cannot afford that some of its citizens receive exorbitant incomes for public money, rest from the age of 45 and until the end of life: this inevitably leads to social discontent, conflicts between social groups, a sense of disappointment that simply attracts people to leave the country.

So far, special pensions cost the budget about 1% of GDP. Now. Given that tens of thousands of adults in their prime can retire each year with sums far greater than their last paycheck, we’ll be reaching multiples of that level in a few years. And, importantly, to a caste of powerful, well-organized people, ready to defend their privileges to a wave. Is this what we are waiting for?

I noticed that the topic of special pensions seems to have reached the ears of top politicians, but who want to radically change… and leave everything as it was before. All these politicians seem to live in a different world, or who knows, maybe they have an agenda other than the fundamental national interest. I heard all kinds of whining, about concerns that immediately removing unnecessary privileges is risky and the like.

Personally, I believe that there is a radical solution: the creation of a law that immediately and definitively cancels all special pensions, lists the paid ones – and this text becomes the subject of a constitutional referendum in one of the 4 elections of the year. future. This text may provide that the Constitution prohibits the appointment of a pension at a different age and under different conditions than those applicable to all citizens. This text may include, for example, the following:

“When applying the provisions of Art. 16. paragraph 1 of the Constitution of Romania, from the date of publication of this law in the Official Gazette, all laws establishing preferential regimes for certain socio-professional categories regarding the retirement age and/or the method of calculating pensions shall cease to apply and the payment of any pension under these by law is terminated on the same date. Persons who, in accordance with current legislation, meet the conditions for retirement, have their pension rights recalculated with the inclusion in the calculation of all income for which one or more forms of pension were paid. Persons who, in accordance with the current legislation, do not meet the conditions for retirement, are reinstated in accordance with the legislation to positions in accordance with qualifications and work experience.” –

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