Opposition: Tax reform punishes pensioners

Late-night parliamentary debate sees tax reform proposal picked apart by political rivals

May 31st, 2012 1:20 pm| by admin

The government’s proposed tax reform was subject to harsh criticism last night during a parliamentary debate that lasted well beyond the stroke of midnight.

The tax reform is intended to better reward those in work and encourage those on welfare to take jobs, and those with jobs to work longer hours.

Prime Minister Helle Thorning-Schmidt (Socialdemokraterne) said, however, that the reform was open to compromise in order to ensure it received as broad political backing as possible – especially from the main opposition party, Venstre.

“We have always clearly said that those who help find savings through a tax reform can help decide how they will be spent," Thorning-Schmidt told Jyllands-Posten newspaper. "It’s a clear signal to Venstre that if they have any demands in these negotiations then they should step up to the negotiation table.”

“There are many parties that want to increase in the employment deduction and take 250,000 people out of topskat," she added. "Isn’t it about time we sat around a negotiation table and made it happen?”

While the opposition parties welcomed attempts to cut income tax, the decision not to extend the increase in threshold of the top tax bracket, topskat, to pensioners was widely criticised.

“It no longer pays to save up for your pension. I don’t understand how a prime minister that went into an election on a platform of fairness could be so unfair,” Liberal Alliance's political spokesperson, Simon Ammitzbøll, said during the debate.

Ammitzbøll’s position was echoed also by the leaders of both the Venstre and Konservative parties.

“Why is it reasonable that a working 68-year-old should pay more tax than a working 64-year-old? The government needs to explain this,” Venstre’s leader, Lars Løkke Rasmussen, said.

Rasmussen has already criticised the government’s tax reform for “taking money from one pocket and putting it in another” due to the government’s proposal to cut income tax but raise property tax instead.

“We want a real tax reform where taxes on working are reduced in order to ease the burden on businesses.”

Yesterday's debate in parliament raged for twelve hours. It is thought that a deal on tax reform will be ready within three weeks.

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