with the installation of the new Government, so the leader of the PSD Liviu Dragnea and minister of Finance, Eugen Teodorovici have talked about the implementation of the tax on global income, as set out in the government program of the PSD. “The tax on global income is in the analysis at the Ministry of Finance, we will present it when you will be clarified all the concepts, but without a computer system well-tuned to will have an idea on which we want to apply”, said Teodorovici at the hearings in Parliament, before taking over the Finance portfolio.
Only that the tax on global income, as defined in the PSD, it is useless. Let’s take an example. An employee earns 2,000 lei on the book of job, but in addition still has two contracts on rights of the author, from two different employers, of 2,000 lei each. In total, cashing the monthly 6,000 lei. At this time, the income tax is 10%. Therefore, each employer will retain the employee by 200 lei from the three sources of income. Basically, the employee plăteșțe monthly to the state a tax of 600 lei. What means the tax on global income? The state accounted for all three of the income of the employee and impose a 10% tax on the total income, i.e. 10% directly on the 6,000 lei, not broken down per each 2,000 lei in hand. The money she charged the state will be 600 lei, only that they would call the tax on global income. The state wouldn’t charge you a penny extra, so what’s the sense? None.
But PSD sources have told “the Truth” that the tax on global income would come bundled with the tax progressive. “I don’t rule out a return to progressive taxation, if that makes sense”, said Eugen Teodorovici. And, from the perspective of the state, has a logic.
Let’s keep the same example. An employee earns 2,000 lei on the book of job, plus another 4,000 lei from the two contracts of copyright. In the case of progressive tax, the state establishes some thresholds for the taxation depending on income. Let’s assume some thresholds hypothetical: 10% tax for income below 2,000 lei; 15% tax for income between 2,000 and 4,000 lei; 20% tax for income between over 4,000 lei. The thresholds are not purely hypothetical. According to sources from the PSD, the thresholds are close to these amounts were taken into discussion.
hard Work on behalf of the state
Back to our example, the employee who earns 6,000 lei from three different sources. Automatically, the state stops them by 10% in the three wages of 2,000 lei. So in the bucket of the budget get 600 lei as a tax on an income of 6,000 lei. Here comes the combination of the global income tax and tax progressively. Cut 600 lei from the total payout of 6,000 lei and anagajatului remain 5.4000 lei. If we refer to the threshold hypothetical above, this income – 5,400 lei should be taxed once with 20%, because exceeding the threshold of 4,000 lei. I mean other 1,080 lei on the employee, of his work, you have to give the state. If we add up the two taxes, it follows that at a salary of 6,000 lei obtained from three job sites, a anagajt get to pay the state’s 1,680 lei, i.e. 28% of the amount won. Basically, nearly one of three salaries reach into the pocket of the state.
According to the government program of the PSD, the Government is expected to provide certain tax breaks or deductions of taxes to persons who exceed certain thresholds of taxation, but, even so, in the pocket of the state will get more money from the progressive tax than from the tax rate which is now in force (10%). So the global income tax makes sense only if it comes bundled with the income tax progressive. And the discussion about the transition to tax progressively is acting in the context in which the governance of the PSD collects where can the money to cover holes in the state budget.
“the Tax global income, remains”
the Sources cited argue that the ALDE leader, Calin Popescu Tariceanu, is opposed to progressive taxation, under the conditions in which it is a deeply left-wing, and the party he leads is posing as a liberal one. Asked by “the Truth” if you oppose progressive taxation, the deputy ALDE Varujan Vosganian answered: “On the agenda of the ALDE is not the increase of taxes. What the lord has said Teodorovici, ask mr. Teodorovici“.
Even if the inside of the ruling coalition opposed the progressive tax, Calin Popescu Tariceanu supports the global income tax, although the two forms of taxation have no sense one without the other. “Tax global income, which was announced at the beginning of the government program, will remain, but I can’t today give you a term of his introduction, because the Ministry of Finance has made a preparation wide-ranging and thorough. Taxes and new taxes, no“, said the leader of the ALDE in a week ago.
In 2005, Calin Popescu Tariceanu, from the position of prime minister, abolished the tax progressive and has implemented a single-rate: 16% at that time, reduced the governance of the PSD at 10% with effect from 1 January 2018.
do Not rule out a return to progressive taxation, if that makes sense.
Eugen Teodorovici, minister of Finance