Anyone who earns less than 3,151 euros gross per month will really have their tax progression abolished completely, “that’s the sticking point,” said economist Denes Kucsera from the liberal business think tank Agenda Austria. Even those who earn more will do much better in the future than before, but there is no complete compensation for the cold progression, says Kucsera.
Basically, one welcomes the extensive abolition of cold progression, so that an old demand of Agenda Austria is fulfilled, said Kucsera to the APA. Every percentage point of inflation has so far meant an additional burden of 300 million euros for taxpayers. “The government is currently assuming 5.2 percent inflation in the period from July 2021 to July 2022, which will be more or less compensated for. That means approx. 1.8 billion euros.” But if you were to take the cold progression for the entire year – i.e. January to January 2022 – then you might also reach three billion “relatively easily”.
“Equal relief for all taxpayers would be better”
However, Agenda Austria is bothered by the fact that lower incomes are relieved more of the cold progression than higher ones. “It would have been even better to relieve every taxpayer immediately,” says Kucsera.
However, the differences are not really big: while the cold progression is overcompensated by 21 euros per year with a gross monthly income of 1,500 euros and by 40 euros at 2,500 euros, there is no complete compensation of the cold progression for incomes over 3,151 euros, this is missing 20 euros per year. With a gross income of 6,500 euros, 93 euros are still missing for complete compensation, Agenda Austria has calculated.
