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Austrian Unions Push For Lower Income Tax Rates

by Ulrika Lomas, Tax-News.com, Brussels

11 April 2014


The President of the Austrian Federation of Trade Unions (ÖGB), Erich Foglar, has urged the Government to swiftly reduce the income tax burden on low-salaried workers, and provide more than a "cosmetic" reduction.

Specifically, Foglar advised the Government to significantly lower the entry rate of income tax from 36.5 percent, and to make the system more progressive to benefit low income earners.

Foglar called on the Government's tax reform working group to present concrete proposals by the end of the year, to allow a new structure to apply in 2015. He argued that it is simply unacceptable that wage rises are pushing workers into paying higher taxes, and cancelling out any net salary gains.

Austrian Vice Chancellor and Finance Minister Michael Spindelegger has made clear, however, that there is currently no fiscal room to lower labor taxes for workers. Spindelegger said the Government must first rebalance the public finances by 2016 before it cuts levies.

Individual income tax rates ramp up sharply for low- and middle-income earners. An entry rate of income tax of 36.5 percent is levied on annual income of between EUR11,000 (USD15,287) and EUR25,000, while a rate of 43.21 percent is then imposed on income up to EUR60,000. Income in excess of EUR60,000 are subject to the nation's top tax rate of 50 percent.

TAGS: Finance | tax | tax thresholds | tax rates | Austria | tax reform | Trade Union | individual income tax

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