Austrian Unions Threaten Action Over Tax Reform

by Ulrika Lomas, Tax-News.com, Brussels

03 June 2014

Austria's coalition Government should unite on plans to reform taxation in 2015 or face industrial action, the Austrian Federation of Trade Unions (ÖGB) has warned.

The priority for 2014 and 2015 must be to remove stealth tax in the income tax system for low-paid workers, pushed into higher tax brackets after a wage rise, ÖGB president Erich Foglar said.

The tax relief should be financed by wealth-related taxes and additional revenue from increased consumption, Foglar explained. The ÖGB and the Austrian Chamber of Labor will draw up proposals by September to expedite the reform, he said.

The Austrian Chamber of Labor had earlier called on the Social Democrat (SPÖ) and People's Party (ÖVP) governing alliance to fund a cut in the 36.5 percent rate of income tax through the introduction of a "millionaire's tax."

Austrian Chancellor Werner Faymann (SPÖ) said the unions' support marks an important step forward in his aim to introduce wealth tax-funded tax cuts from as early as January 1, 2015.

The ÖVP is opposed to new taxes on the rich, however, and has said that it will not finance tax reform with borrowing. The party has said it wants to stabilize the public finances before considering possible tax cuts.

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