Red Tape hot box on When Robin Hood falls through a loophole
Unfortunately for the government, the vision of getting zł.240 million from the richest people in Poland is an illusion. Of the 4,000 people who have come within this new tax, most of them will surely take advantage of legal possibilities to reduce lower taxable income. There are many ways to avoid paying such high taxes and even the financial vice minister is offering advice on how to get around this new law legally.
One possibility is to sign a managerial contract, which comprises 20 percent income tax, rather than to work as a full time employee. Another is to create your own firm and thus stop being a hired employee who in Poland, it seems, is being discriminated against. Finally, there is the possibility to move to a tax haven. You don't have to go far, just across the border to Slovakia where 19 percent income tax is binding. This would definitely make our neighbors happy. Up till now the highest income tax had been 40 percent and even then many rich businessmen tried to avoid it. After all, they have the means to do so-with all the money that they have they can hire the best financial advisors.
However, there were still many who paid the top level of income tax. Among them were many bank managers who said that it was just improper for them to seek any loopholes in a tax law. Now they might change their minds. Especially when they see that the government, instead of improving our tax system, is not only making it worse but also hitting our public finances. The senator's and deputy's aim is to gain the confidence of their electorate. By taking money from the rich who are in the minority and giving to the poor they hope to curry favor with the public while economic development is put aside.
Let us look at Sweden, a country that is far better developed than Poland and where income tax for the richest is also 50%. Although people there have the feeling that this tax money is used for the country's development and to cover high public expenditures, many Swedes prefer to keep most of their income in their pockets. Thus the rich ones often choose places to live where income tax isn't so high. We will see how our businessmen are going to respond to this new tax and I hope it won't be by migrating to our southern neighbor.
One possibility is to sign a managerial contract, which comprises 20 percent income tax, rather than to work as a full time employee. Another is to create your own firm and thus stop being a hired employee who in Poland, it seems, is being discriminated against. Finally, there is the possibility to move to a tax haven. You don't have to go far, just across the border to Slovakia where 19 percent income tax is binding. This would definitely make our neighbors happy. Up till now the highest income tax had been 40 percent and even then many rich businessmen tried to avoid it. After all, they have the means to do so-with all the money that they have they can hire the best financial advisors.
However, there were still many who paid the top level of income tax. Among them were many bank managers who said that it was just improper for them to seek any loopholes in a tax law. Now they might change their minds. Especially when they see that the government, instead of improving our tax system, is not only making it worse but also hitting our public finances. The senator's and deputy's aim is to gain the confidence of their electorate. By taking money from the rich who are in the minority and giving to the poor they hope to curry favor with the public while economic development is put aside.
Let us look at Sweden, a country that is far better developed than Poland and where income tax for the richest is also 50%. Although people there have the feeling that this tax money is used for the country's development and to cover high public expenditures, many Swedes prefer to keep most of their income in their pockets. Thus the rich ones often choose places to live where income tax isn't so high. We will see how our businessmen are going to respond to this new tax and I hope it won't be by migrating to our southern neighbor.
