By: Vida Kocjan
The coalition of the Gibanja Svoboda, SD, and the Levica will be radically left and not liberal. The coalition agreement shows that they are introducing a series of involuntary and harmful measures for the state and citizens. Taxes, taxes, taxes, and the destruction of families.
Romana Tomc, an MEP, and vice-president of the SDS party wrote for the coalition agreement of the new government that its content is approximately the same as that written by the Greek radical left-wing party Syriza. The contract contains far-left, completely unbalanced, economically unfriendly, and financially unsustainable ideas. In fact, the coalition agreement covers most of the programme of the Levica party, which recently declared itself the sister party of Greek Syriza.
Tomc added that if what is written in the coalition agreement is realised, nothing good is promised to us. “New higher taxes follow, progressive property taxation means covert nationalisation, brutal interference in democratic processes, such as the recall of elected representatives. In short, complete subordination of the state in all areas.”
New (higher) taxes
The new coalition announces progressive taxation of all citizens’ property. Economists describe such intentions as a rather dangerous and unique solution in the world. Only a few countries have progressive taxation. And Slovenia will now be among them. It is not clear from the coalition agreement what the tax rate of the new tax will be. Several options are mentioned in public, from 0.1 to 1.5 percent, which according to some sources the Levica party expects. Robert Golob mentioned in the 24ur show on commercial POP TV that the new tax would amount to 1 percent of the property. Percentage of tax is to be paid on every 100 thousand euros of property.
All real estate will be taxed, including agricultural land, means of production, business facilities, cars, savings in banks, securities, and the like. In short, everything that someone has in Slovenia, even if they have already paid taxes for all this.
The coalition agreement states that the purpose of the new progressive taxation is to ensure long-term financing of social and development policies of the state and local communities. At the level of local communities, this tax will replace the current compensation for the use of building land (NUSZ) and related taxes, and at the same time the system of financing the state and local communities will be properly adjusted in a fair way.
Covert nationalisation
Based on Golob’s statements on the 1% tax and based on what is known so far, assets worth 200 thousand euros, for example, will be taxed 20 times more than before. All in all, it also means covert nationalisation of property. Although Golob was upset at the presentation that nationalisation is not mentioned anywhere in the coalition agreement, the announced taxes mean just that. If someone is unable to pay several thousand euros in additional tax, the state will settle on his property and eventually confiscate it. Romana Tomc also points out that this tax means covert nationalisation. The fact is that the citizens built their real estate with a lot of personal work, and their income is not such that they could now pay high taxes to the state for it. The calculation is simple. If someone has an apartment or house in a good location and the property on the market is worth hundreds of thousands of euros, the percentage of tax will be from 2,000 to 5,000 euros. However, the citizens will not be able to do that.
They are planning lower wages
However, a progressive property tax is not the only thing the new government is planning. It is clear from the coalition agreement that the provisions of this year’s amendment to the Personal Income Tax Act will be repealed as early as January 1st, 2023. They will only leave a general income tax relief of 4,500 euros. Everything else will be repealed, including a new senior relief for people over 70, less income tax for high school and university students, firefighters, and the like. They will also increase the rental tax, which means rents will increase. All this means that citizens will be cheated, and net salaries will not be higher as was planned by the government of Janez Janša due to lower taxes. According to their proposal, each employee would receive one net salary more in 2025, until then the increase would be gradual. At Saturday’s presentation of the government’s intentions, Economy Minister Matjaž Han commented that the state must get the money somewhere to allocate it elsewhere. However, he did not explain why it is better for politics to collect money first through taxes and then distribute it through subsidies.
We should also add that the new government is also planning to overhaul the motor vehicle taxation system. It is clear that they are looking for new sources of funding for their needs also in this area.
However, the taxation of entrepreneurs is thus a rarity of the new government. They are announcing a pogrom. It is scandalous that Matjaž Han is convinced that companies in Slovenia operate almost as in tax havens. According to him, taxes are low. However, he did not explain why economic strategist and tycoon Sandi Češko transferred his assets from SD to abroad, to the Netherlands, which is considered a tax haven.
Opinions of economists
Slovenske novice recently asked economist Dušan Mramor, Matej Lahovnik from the Faculty of Economics, and economist Anže Burger from the Faculty of Social Sciences whether we need a property tax and what this would mean for the well-being of people. Mramor, a former finance minister, warned that the new tax does not increase prosperity. Like Romana Tomc, Mramor is convinced that Slovenia will lose talent. He said that Slovenia has less taxed property and real estate than other developed countries, but he does not support the logic to collect more taxes and allocate them to further increase social spending and thus increase public spending, income equality, and equality of wealth. He believes that this does not increase the material well-being of people, but it is messaged that with such changes the work pays less and less.
The most affected middle class
Economist Matej Lahovnik pointed out that the middle class will be the most affected, while the rich have money abroad. He added: “The OECD warns us that we need to reduce the burden on income from work and put more burden on property, so additional burdening on property only makes sense if we reduce labour taxes at the same time. However, we should not introduce additional taxes just to finance higher public spending. Any economic policy should encourage investment and savings, not just consumption, so the introduction of additional property taxes can also be a false signal that those who invest and save will be punished.”
Lahovnik adds that the wealthiest will avoid this tax, as they have done so far, through creative means, such as the establishment of various foundations or legal entities abroad, to which they will transfer property and avoid taxes in Slovenia. We should not ignore the fact that many have real estate in Croatia, and we can come to a paradox when the weekend house somewhere in Slovenia, e.g., in Kozjansko, will be taxed, but the one on the Croatian coast will not be, which will allow the new government to encourage investment in real estate elsewhere.
Property taxation does not make sense
Anže Burger, however, believes that in a situation of high indebtedness and an aging population, the government should first look for reserves in public expenditure so that raising taxes would not be necessary at all. Labour taxes need to be reduced and social contributions limited upwards.
He is convinced that property taxation is pointless, except in the case of property tax on land value, as general property taxation reduces incentives for investment, encourages consumption and causes the relocation of property abroad. “Property, such as agricultural land, means of production, business facilities and museums, is completely pointless and harmful to tax, because it inhibits economic activity. In Slovenia, we need to reduce tax progressiveness, as we are uncompetitive for hiring experts compared to neighbouring countries. No one should pay more than 50 percent of taxes and contributions on their income,” says Burger.
LGBT ideology
Taxes and again and again new taxes with which the new government wants to satisfy the appetites of the so-called civil society, collected in so-called Voice of the people (Ljubljana cyclists), which it put on the pedestal of government, is not the only thing that is disturbing in the new coalition agreement.
They plan to introduce the LGBT ideology in schools, which is an acronym that covers lesbians, gays, bisexuals, and transgender people. At the same time, they intend to put an LGBT activist at the head of the family department, who wanted to change the definition of the family. Citizens rejected his idea twice in a referendum. This is Simon Maljevac, who is supposed to head the department of labour, family, social affairs, and equal opportunities after the amendment to the government law. With him at the helm, we are therefore promised new attempts to destroy families. Until the increase in ministerial portfolios, he will be the state secretary at the existing ministry under the leadership of Luka Mesec, the coordinator of the Levica party. After the change, the latter is supposed to take over a new department, the Ministry of Solidarity Future, where he will deal with economic democracy, whatever that means.
Harmful to children
The new coalition also intends to partially change the curricula in schools. Among other things, they intend to introduce content that will “address gender and other stereotypes in the name of building a more tolerant society”. They also predict zero tolerance for hate speech and discrimination, which should also be included in the curriculum. What does that mean? Aleš Primc from the Movement for Children and Families describes the announcement of the new government as a great threat to children. The negative consequences of this kind of ideology in schools can be fatal to children’s development. He urges parents of children to organise and demand the elimination of dangerous education. He adds that the movement will coordinate activities to protect the rights of parents and children at school.