Taxpayers bleed: Cold progression costs 360 million euros a year!

Taxpayers bleed: Cold progression costs 360 million euros a year!

The government in Austria is faced with a major change in tax legislation, since the abolition of the cold progression, which caused outrage for years, is only partially implemented. This reports the Krone . Originally, the cold progression, which meant that wage increases were partially consumed by higher tax burdens than a load for the employees. Although the abolition was decided in 2022, a third of the tax adjustment is now not automatically linked to inflation, which taxpayers add up to around 360 million euros annually. Experts estimate that a complete abolition would be justified to minimize the real tax burden for employees.

new tax framework from 2025

With the coalition from the ÖVP and the Greens, steps towards relief in the tax system are planned, as the orf reported. From 2025, the template should bring a noticeable adjustment of the tax levels by almost four percent. The allowance, from which wage and income tax must be paid, is raised to 13,308 euros, which should be particularly advantageous for families and top performers. However, the reactions to these measures are mixed. Critics, such as the FPÖ, refer to the announcements as "Mogelpack" and call for a complete abolition of the cold progression to achieve a real tax relief.

The government is optimistic that these changes can be relieved of taxpayers. In addition to raising the tax levels, regulations to promote families with low incomes should also be made. Despite the positive aspects, many, including the Chamber of Labor, continue to see the need for adaptation and criticize the unequal treatment between the self -employed and employees, which is reinforced by the adjustments. For taxpayers, the uncertainty remains as to whether these measures will actually bring the desired relief or only represent a political maneuver.