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ČSSD wants to tax the rich twice

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According to the Social Democrats (ČSSD), currently the most popular political party, the richest people should fill the holes in the leaky state budget – and, in order to do so, they might receive two new bills as early as next year.

If the Social Democrats win the elections, the rich will pay a higher tax, at 38%, and many of them will no longer reach the new increased ceilings on social and health insurance payments.

Topolánek’s government set the ceiling last year at four times the average monthly wage. The latest ČSSD policy statement at HN’s disposal counts on an increase to six times the average wage. “This is one of the things that can ease the tension both on the pension account and on the health insurance account,” ČSSD Deputy Bohuslav Sobotka said.

If the Social Democrats push through the higher ceilings on insurance payments as soon as 2010 – which should be no problem if they form a coalition with the Communists (KSČM), for example – nearly 100,000 people with incomes over CZK 94,000 will pay hundreds of, and some many thousands of, crowns more every month than they do now.

Moreover, the ČSSD wants to raise taxes to 38% for people making more than CZK 100,000 a month. The higher taxes combined with higher ceilings on insurance would cause mandatory payments by people with a gross monthly wage of CZK 120,000 to increase by roughly CZK 3,900. Those earning CZK 140,000 a month would pay CZK 8,850 more.

Bohuslav Sobotka promised that the higher taxes would only apply to people with incomes exceeding CZK 100,000. Now that the economic crisis is culminating, it is their turn, Sobotka said. “This is not even the upper-middle class: It is the top level of Czech society in terms of incomes,” Sobotka said. “That is where Topolánek’s government concentrated tax relief, and we want to change it by means of our tax policy.”

In the end, however, Sobotka may be beaten by the ČSSD ‘s more radical wing. “I am facing pressure for a higher taxation on incomes even below CZK 100,000 a month, but I do not want us to go against the middle class,” Sobotka said.

His statement referred mainly to ČSSD Deputy Chairman Zdeněk Škromach. “Countries that charge higher taxes have more money to be able to cope with the crisis,” said Škromach, whose proposal has not yet succeeded.

He also failed to push through to the election platform an 80% tax on golden handshakes to be paid by executives with severance pay higher than CZK 2 million. “Managers should feel solidarity with the rest of the society,” Škromach said.

If the Social Democrats win the elections and have a majority of votes in the lower house together with the Communists, they will push through both the higher ceilings and the tax increase. In fact, the KSČM would like an even bigger tax increase than the ČSSD and would apply no ceilings on insurance payments.

“We want to restore solidarity in society,” KSČM deputy chairman Jiří Dolejš said.

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