PM supports call to raise top tax threshold

Left-wing party SF causes a stir with its proposal to reduce the number of Danes paying the top rate of tax

May 16th, 2012 3:06 pm| by admin
facebooktwittergoogle_pluspinterestmail

Government coalition partner Socialistiske Folkeparti (SF) announced yesterday that they would seek to raise the threshold for the top rate of tax (topskat) as part of the government’s tax reforms.

According to the party’s political spokesperson, Jesper Petersen, too many Danes are paying an additional 15 percent tax on all earnings over 390,000 kroner a year.

“Our goal with the tax reform is to give Danes in low and middle income groups a larger reward from their work,” Petersen told Berlingske newspaper. “In order for the budget to be financed fairly, the reform needs to raise the threshold for topskat. This will mean that significantly fewer ordinary employees will pay topskat.”

The announcement was treated as surprising by many, given that SF traditionally supports high taxes for the wealthiest. But Petersen pointed out that some metalworkers, nurses, teachers and carpenters end up paying the top tax rate.

Negotiations on tax reform are still in their early stages and are not expected to finish before the end of the summer, though PM Helle Thorning-Schmidt did offer her support for SF’s proposal at her weekly press conference yesterday.

“The government feels that there are too many Danes paying topskat that shouldn’t be,” Thorning-Schmidt said. “It’s good that we are having a discussion about how we see the tax system.”

With so far to go with the negotiations, neither she nor Jespersen would state exactly how much higher they intend to raise the tax threshold.

Dennis Kristensen, chairman of trade union FOA, expressed concern that the poor would end up paying for the tax cut.

“We are beginning to see the outline of a tax reform that will benefit those in employment,” Kristensen told Berlingske. “That means that welfare recipients, pensioners and other weak groups will have to sponsor it. Our trade union believes in protecting the weak rather than benefiting the richest.”

Government support party Enhedslisten also sounded worry over SF’s position.

“SF used to fight against easing topskat so it’s a little bizarre that they themselves are now demanding it in the tax reform,” Frank Aaen from Enhedslisten told Berlingske. “The tax reform is close to being the government’s last chance for sending a portion of the bill to wealthiest. The government has said that everyone has to contribute to fixing the crisis.”

Libertarian think tank Cepos welcomed the move to reduce the number of people paying the top rate but argued it would be more effective to simply cut the top rate instead.

“It is of course positive that they want to raise the threshold for the top rate of tax, but it sill won’t be attractive enough for the most productive Danes,” Cepos’ chief economist, Mads Lundby Hansen, told epn.dk.

Rockstar pig nursed a brutal hangover in style over the weekend (photo: Landsskuet - Dyreskuet i Herning Facebook page)
A lying pig, but no porkie pies
You can imagine that some of the cleaners' comments following a party for 1...
Glostrup, Rødovre, Ballerup and Frederiksberg were among the 15 municipalities that received nothing from 2011-2013 (photo: iStock)
Smaller municipalities missing out on welfare funds for the vulnerable
Not all of Denmark's 98 municipalities reap the rewards from the slush fun...
Wozniacki will regret this loss more than most given her easy draw (photo: si.robi)
Wozniacki out of Wimbledon
Caroline Wozniacki has once again failed to advance beyond the fourth round...
About 30,000 Jersey bull calves are put down in Denmark every year (photo: iStock)
New Danish project to curb euthanisation of Jersey calves
Every year some 30,000 Jersey bull calves are put down at Danish farms and ...
Passengers with bikes have increased from 2.1 to 9 million since 2010 (photo: Leif Jørgensen)
Every tenth S-train passenger travels with a bicycle
There has been a marked increase in passengers taking their bikes onto the ...
Pranov hopes that Heliac can be used to replace open fires used for cooking in developing countries (photo: Paul R Caron)
Danish project could save lives in developing countries
Danish engineer Henrik Pranov has developed a solar panel using plastic fil...