Final Word from Friday, March 12, 2004

Premier Vladimír Špidla said yesterday that he's giving thought to the idea that non-wage labor costs could be reduced during the next cabinet's term in office. Speaking at a fundraising event for Junior Achievement, he said the government doesn't intend to lower the overall tax burden, because he isn't convinced that there's a correlation between low taxes and economic prosperity. However, the next government might use revenue from the new ecologic tax to offset lower social taxes. The CR devotes 21% of GDP to the social net, he said, compared to as much as 33% in other Christian countries. At the same time, he acknowledged that Czech social taxes are among the highest. There's a big gap between what workers pay in and what they get back. What Špidla didn't say is that the ecologic tax would have to be quite high to make any difference in the social taxes. security


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