There is yet no sign of tax cuts for low wage earners, which the government promised to implement this spring. The premise of the collective agreements which were signed in April was supportive action by the government, among other things a new low-wage tax bracket for the lowest wages. No tax proposals have seen the light of day but one: a lowering of the capital gains tax. While low wage earners wait for the promises to be fulfilled, the government rushes into action to make life better for wealthy people.“We didn’t ask for the lowering of the capital gains tax of wealthy people,” says Sólveig Anna Jónsdóttir, the chairman of Efling. “This is not just a failure to fulfill a promise but runs directly counter to the basic idea of the so-called Quality of Life Agreement; which was to lower the economic burdens of those who suffer the most under the weight of this economic system and to have those who got rich simply through owning property pay a larger share of the operational costs of society.”The central committee of ASÍ today said that their patience was at an end. The central committee demanded that the proposals which were promised during negotiations this spring be realized immediately.The announcement from ASÍ can be read here in its entirety:Since spring, the labor movement has repeatedly called for proposals from the government for tax cuts for low wage earners. The central committee of ASÍ has now run out of patience and calls on the government to put their words into actions.In a declaration from the government regarding the collective agreements signed on April 4th, the following is stated:
- A three-tier tax system will be implemented with a new low-wage tax bracket. The plan is for such an action to increase the disposable income of the lowest wage earners by ten thousand kronas per month.
- The tax-free limit is to remain unchanged in real terms during the period of implementation and then the personal tax credit is increased, as well as the tax bracket, above the rate of inflation, to the amount of the increase of productivity.
Now, just under five months after the collective agreements were signed, the only tax proposals made by the government are their plans to alter the capital gains tax so that capital owners don’t need to pay taxes from their entire capital gains but only from the real interests. Thus, it appears that the highest priority for the government seems to be to help capital owners avoid having to pay their fair share to society as wage earners are made to do. Meanwhile, there is no sign of the abovementioned tax cuts for low wage earners.As the agreements were signed, a great emphasis was placed on these matters and it was the premise for the signing of collective agreements with the Confederation of Icelandic Enterprise (SA) and their approval by the members of the unions. Despite repeated demands to see the proposals, they have not yet materialized and the central committee of ASÍ demands that they be presented immediately.