Austria's SPÖ Rejects ÖVP Wealth Tax Ultimatum

by Ulrika Lomas, Tax-News.com, Brussels

16 August 2010

Austria’s Social Democratic Party (SPÖ) has rejected calls by coalition partner the Austrian People’s Party (ÖVP) to relinquish any plans for a wealth tax.

ÖVP General Secretary Fritz Kaltenegger had urged Austria’s Chancellor and SPÖ leader, Werner Faymann, to issue a guarantee, ahead of the forthcoming Council of Ministers meeting on August 24, that wealth taxes would not feature in the 2011 budgetary discussions in the autumn.

Standing firm on its demands for a fair tax system in Austria, the SPÖ announced that it would undoubtedly keep its options open in terms of budgetary negotiations. Alluding to its seven-point programme on wealth-related taxes, the party underlined the fact that its insistence on these taxes would be very much dependent on whether or not the required EUR1.7bn in additional revenues could be achieved without the introduction of such taxes.

Designed to generate additional revenues necessary for budgetary consolidation, the SPÖ’s seven-point programme, drawn up by an appointed working group on fair distribution, led by General Secretary Günther Kräuter and Financial State Secretary Andreas Schieder, includes the following proposals: the introduction of a bank levy; the introduction of a Europe-wide financial transactions tax (or alternatively a stock market sales tax in the event that Austria elects to proceed unilaterally); a financial capital gains tax; reform of both foundations and group tax in Austria; the deductibility of executive salaries; and finally the prevention of tax evasion.

SPÖ General Secretary Kräuter has also confirmed that internal party discussions regarding the introduction of a wealth tax are still ongoing. While Kräuter is clearly in favour of imposing a levy on all wealth in excess of EUR1m, unions have reportedly advocated a EUR500,000 threshold.

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