More money for all workers! With a large majority, the National Council decided on Wednesday to end the cold progression. What does it mean.
On Thursday ÖVP, Greens, FPÖ and NEOS supported the government’s new “inflation relief package” in the National Council – only the SPÖ objected because it doubted the effectiveness of the measures. In the last vote, the NEOS passed a “yes”. The end of the cold progression should counter the creeping increase in taxes through higher tax brackets. To this end, various measures are taken, including annual income tax rates are automatically adjusted by two-thirds of the inflation rate and additional revenue is relieved.
“For the year 2023, an automatic increase of the income limits in the law on wages and income tax of 3.46% is foreseen, with the granting of an extra-curricular increase at the two lowest tariff levels for a total of 6, 3% to cushion the current inflation, “summarizes the press service of the Parliament together. What does this mean for you in practice?
More net from gross! Two examples: those who previously earned € 2,000 gross as an employee received € 1,526.62 net. From 2023 it will be € 1,553.04 – € 22.75 more due to the end of the cold progression, € 3.67 more due to the new marginal tax rates.
“Refund” and “More purchasing power”
For example, with a gross salary of 3,500 euros, from 2023 it will be 2,378.77 euros instead of 2,316.37 euros. Finance Minister Magnus Brunner (ÖVP) described the decision to give people back “money” and “more purchasing power” as a “sustainable system change in favor of taxpayers”. The SPÖ, on the other hand, criticized the fact that this was not fair: “The poorest fifth of the population receives 80 euros, the richest 436 euros”, denounced Christoph Matznetter (SPÖ). The request for social differentiation was, however, rejected.
Despite the approval, the FPÖ also pointed out some critical points, for example, as Hubert Fuchs complained that the amount of the adjustments was below the “record inflation” of ten percent. Curious: the budget planned for the next few years has even been described as a “manifesto of irresponsibility”. NEOS in turn criticized the fact that the money was again distributed according to the watering can principle, according to NEOS head Beate Meinl-Reisinger. Furthermore, the cold progression will not be abolished from the budget package, there is only a “partial renunciation” of higher tax revenues.
