Jüri Ratas: instead of a tax reform favoring the wealthy, a European graduated income tax must be introduced

The Estonian Central Party does not support the plan of the government led by the Reform Party to implement a tax reform favoring high-salaried people, and the Riigikogu faction proposes to introduce a solidarity and European graduated income tax, says party chairman Jüri Ratas.

“From the tax changes proposed by the Reform Party, low-wage earners will benefit less, and the biggest victory awaits high-wage earners instead. The Reform Party wants to implement at any cost the extremely expensive, 500 million euro election promise, with which the wealthier than average people are gifted with 700 euro tax-free income every month. The Center Party is categorically against it,” he confirmed Jüri Ratas.

According to the deputy chairman of the Riigikogu, the Center Party’s tax plan consists of three levels. “Everyone is subject to income tax exemption equal to the minimum wage. Income from minimum wage up to two average wages is taxed at 20 percent income tax. The portion of income that exceeds two average salaries is taxed at a 30 percent income tax rate,” explained Jüri Ratas.

The faction of the Center Party makes a total of six amendments to the draft income tax law, which is going to the second reading, which, according to Jüri Ratas, will help to improve the livelihood of low-wage and middle-class people in particular.

“It is time to move to a European tax system where the tax burden depends on a person’s income,” he added. “The graduated income tax we offer ensures a more solidary society and increases the income of low-wage earners and the middle class. Considering that Estonia is one of the countries with the fastest price growth in Europe, every extra euro helps people. In order to distribute social wealth more fairly, we tax income that exceeds twice the average Estonian salary at a higher tax rate.”

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