Tax cuts: the social obscenity

It is the anti-social, regressive and unsustainable tax cut – not Franco Debono – which is the elephant in the room.

Ultimately Gonzi comes out of all this as just another populist politician who cares for his own without any concern for the most vulnerable in society.
Ultimately Gonzi comes out of all this as just another populist politician who cares for his own without any concern for the most vulnerable in society.

In one single stroke, Prime Minister Lawrence Gonzi has thrown away any pretence of social responsibility and fiscal prudence by proposing unsustainable tax cuts for the wealthiest segment of the population.  Even the Lib-Con coalition in the UK has refrained from making such an indecent proposal in these difficult times, limiting itself to decrease the tax burden on lower income earners.

Surely Gonzi's major merit in the past four year was weathering the international economic crisis by reneging on his pre-2008 electoral promise to cut taxes for the wealthiest segment and investing money in protecting jobs.

Now he is seeking another mandate on the same anti-social platform fully knowing that at current rates of economic growth, his tax revenue projections are pure bollocks. And if enacted, the tax cuts will leave the country bankrupt.

Ultimately Gonzi comes out of all this as just another populist politician who cares for his own without any concern for the most vulnerable in society.

All his pandering to the high moral ground in the past years has been exposed as a hoax.

This is enough reason for any decent social democratic or Christian-democratic member of parliament to vote against the budget.

But instead of committing his party to withdraw the anti-social tax cuts, Opposition leader Joseph Muscat has committed himself to retain the framework of this unsustainable and regressive budget. His only redeeming act was to commit his party to remove income tax on minimum wage earners. Surely the imposition of income tax on minimum wage earners simply added salt to the wound, but removing the salt without curing the wound is simply not enough.

In the absence of a clear commitment to withdraw the indecent tax cuts, Muscat's talk on the altruism of Maltese society and Gonzi's appeal against egoism is meaningless. Once again Muscat has reduced politics to a strategy game where only the votes of the upper-middle class count.

One can simply interpret Muscat's commitment to retain the tax cuts as a way out of his quandary on how to deal with its other commitment to reduce electricity tariffs. It is clear that in the short term, the two measures - that of decreasing the bills and decreasing taxes - are mutually exclusive.  By retaining this budget he will be buying time to postpone the utility bills promise.

Tonight Franco Debono has a very valid reason to vote against the budget which is far more important than Austin Gatt. The reason why the budget should not be approved, before or after the election is because it is anti social, regressive and unsustainable.

As Lino Spiteri wrote yesterday: "I have never seen the likes of this social obscenity from either party."

avatar
In every single budget, social cases are helped in one way or another. What's wrong if for one time we help also those 'guilty' of maintaining themselves AND others. Unlike the 'imsieken' they already pay alot of taxes.
avatar
In every single budget, social cases are helped in one way or another. What's wrong if for one time we help also those 'guilty' of maintaining themselves AND others. Unlike the 'imsieken' they already pay alot of taxes.
avatar
In every single budget, social cases are helped in one way or another. What's wrong if for one time we help also those 'guilty' of maintaining themselves AND others. Unlike the 'imsieken' they already pay alot of taxes.
avatar
In every single budget, social cases are helped in one way or another. What's wrong if for one time we help also those 'guilty' of maintaining themselves AND others. Unlike the 'imsieken' they already pay alot of taxes.
avatar
PL is too close to get embroiled in this affair at the moment. 1. It has already declared of removing the tax on minimum wage 2. The higher income bracket tax decrease can also be "re-thought" and will not be going against EU policy. Otherwise for once I applaud you James for a good article.
avatar
sur debono inti tahseb li hawn malta dawk li jaqilaw 30,000 ewro fis sena huma ikkunsidrati high class??? Familja normali fejn jahdem ir ragel u il mara u bir ragel jghamel xoghol part time, id dhul fis sena jaqbez it 30,000 ewro. ma nahsibx li dawn huma xi high class family. l-incentiv fit tnaqqis tat taxxa mhux biex jagevola lil high class kif qed tahseb int imma biex ihajjar lil dawk li jridu jahdmu aktar u jaqilaw aktar flus u b'hekk ir rota finanzjarja tkompli iddur.
avatar
I enjoyed reading this article it truly reflects the new low our politicians have stooped to ,in order to stay or gain power. Even at the highest cost to our country they will do anything to continue feeding off the nations main artery.Good one James.
avatar
The real Maltese TAX situation IncomeBracket IncTax NI Total % on Net 8501-10000 131 975 1106 11.34% 8644 10001-11500 365 1075 1440 13.40% 9310 11501-13000 566 1225 1791 14.62% 10459 13001-14500 782 1375 2157 15.68% 11593 14501-16000 1067 1375 2442 16.01% 12808 16001-17500 1454 1375 2829 16.89% 13921 17501-19500 1876 1375 3251 17.82% 14999 19501-21000 2425 1375 3800 18.31% 16950 21001-25000 3269 1375 4644 20.19% 18356 25001-30000 4753 1375 6128 22.28% 21372 30001-35000 6522 1375 7897 24.30% 24603 35001-40000 8314 1375 9689 25.84% 27811 40001-50001 10702 1375 12077 26.84% 32923 50001-over 23088 1375 24463 25.75% 70537 Enjoy
avatar
James, your opening sentence says it all. You could easily have stopped there (of course, I understand that commercial, publication realities dictate otherwise).
avatar
Algan and KMB had immediately raised the issue of the regressive anti-social nature of the tax cuts for higher wage earners announced in the budget.I am surprised how others especially the unions, the Church and the welfare NGO's did not take up the cudgel on this iniquitous budget proposal which takes us back to the days of gaping differences of wealth between the haves and have nots. Not even a republican president in the US would dare such a proposal today. Now Lino Spiteri in his inimitable style has added cogency and condemnation to this issue by calling it an obscenity. Many of us have been long complaining of the ever growing wealth gap which is a primary concern especially at times of economic crisis . It is totally against the trend in all European countries where a fair but progressive tax regime is considered the basis of a fair and just society in harmony with itself. Pensioners are getting a four Euro increase just enough to buy a Lampuka every two weeks and minimum wage earners will see their paltry increase cut into in contrast to a tax cut of over 3500 euros which higher wage earners will be eventually receiving. This is just a dirty political trick to be seen as having fulfilled the promise in the electoral manifesto at the expense of the lower earners in society. It will also result in lower government revenue in future years which will hamstring a future government in taking socially deserving measures which are urgently needed to close the wealth gap. This tax measure can therefore only be considered as a blatant affront to standards of social decency.