ÖGB demands fair taxation: Rich people have to pay more!

ÖGB demands fair taxation: Rich people have to pay more!

The Austrian Federation of Trade Unions (ÖGB) has announced that it needs a fairer design of budget consolidation in order to counteract the growing injustice that is affecting more and more workers and private households. The focus is particularly on large assets and companies with high profits that contribute only inadequately to government financing. Angela Pfister, head of the economic department at the ÖGB, emphasizes that profitable sectors such as banks and energy companies are already contributing to budget consolidation, but many companies that benefit from government subsidies and tax advantages are hardly contributing to consolidation.

Corporate tax was reduced from 25% to 23%, which means the state loses around 1.5 billion euros annually. In addition, planned spending cuts, especially in pensions, are not seen as a solution. Employees and private households are severely affected by measures such as the cancellation of the climate bonus and cuts in pensions and family benefits. However, there are important funds in the budget for education, the labor market, the second compulsory year of kindergarten, equality and future-oriented investments.

Necessary tax adjustments

The ÖGB demands that large assets and corporate profits be used to generate additional income. A survey shows that more than two thirds of the population believe that the rich should contribute more to consolidation. Pfister criticizes political forces that argue against fair taxation of high wealth and emphasizes that models such as wealth or inheritance taxes prove to be socially balanced in international comparison.

As part of the government program for 2025 to 2029, the government plans to keep the corporate tax rate constant at 23%. The top income tax rate will be extended to 55% until 2029, while the inflation adjustment of the tax rate will be partially suspended. From 2025, a tax-free bonus for employees of up to 1,000 euros will be introduced, which is not tied to a collective agreement.

Debate about wealth tax

The discussion about reintroducing a wealth tax has become more intense, especially after a proposal from the SPÖ. However, new specialist studies warn of the negative consequences of such a tax for the Austrian economy. In particular, it should be noted that a pure wealth tax as a substance tax does not correspond to the efficiency or equivalence principle. In addition, the inclusion of operational assets could lead to a competitive disadvantage for companies.

Imposing a wealth tax could also cause significant administrative burdens, and necessary exemptions and allowances could reduce potential tax revenue. It is estimated that the introduction of a €1 billion wealth tax could lead to a 0.65% drop in GDP and a 0.24% drop in employment in the long term.

The interaction of these factors shows that both tax policy and social justice are at the center of the political debate in Austria. The question remains as to how both the state's fiscal needs and the interests of the working population can be taken into account in a balanced manner.