Cap the social tax

President Václav Klaus signed a social-security amendment yesterday that requires many foreigners, as well as all Czechs, to pay social-security tax on their full income as of Jan. 1. So far, foreigners have been able to avoid the tax, but the state wants them, too, to contribute to the waste-as-you-go pension system. Finance Minister Bohuslav Sobotka said in HN today that no cut in the social tax can be expected in the coming years, because any excess is needed to finance pension reform. A bigger problem for high earners than the rate is the lack of a cap on the income subject to the tax. This might please labor leader Milan Štěch, who thinks managers earn too much money, but it has a negative effect on the CR's ability to attract quality foreign managers and keep top Czechs at home. France has a similar problem but, according to the Financial Times, it plans to correct it as of Jan. 1. The CR is moving in the opposite direction. pay-as-you- go sick-pay Hospodářské noviny