Austria's SPÖ Sets Sights On Wealth Tax

by Ulrika Lomas, Tax-News.com, Brussels

07 September 2010

During a recent meeting of Austria’s Social Democratic Party (SPÖ) in Altmannsdorf, Austrian Chancellor Werner Faymann confirmed his party’s intention to propose additional models for taxing individuals with “large wealth” in excess of EUR1m. Faymann also emphasized that he would not be moved on plans for a bank tax in Austria.

With regards to budgetary consolidation, Chancellor Faymann announced that increasing wealth tax in Austria would form the eighth point of the party’s seven-point programme for deficit reduction.

Designed to generate additional revenues, 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; limiting the deductibility of executive salaries; and finally the prevention of tax evasion.

Rejecting claims made by certain members of the party’s coalition partner the Austrian People’s Party (ÖVP) that the bank tax should simply be introduced in a watered down form, Chancellor Faymann declared that such remarks were certainly “revealing”. Criticizing the ÖVP for their failure to put forward any concrete proposals as regards budgetary consolidation, with the exception of the bank levy on which they are now back-pedalling, Faymann categorically emphasized the need for the bank tax to generate EUR500m annually for the country’s budget. It would be “absurd”, he stated, to shift the burden of the crisis onto the masses.

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