Caps off

While Jan Mládek and other leading Social Democrats were praising themselves yesterday for putting a cap on social- security taxes, Labor Minister Zdeněk Škromach (also ČSSD) struck a deal in Parliament with the Communists to scrap the cap. Not only is this concrete evidence of what a "left bloc" would do, but it also raises expected taxes for Czech and foreign managers and could endanger the Hyundai investment. In addition to scrapping the cap, Škromach and the Communists plan to force all foreigners to join the Czech social and health system. Only EU members and countries with "totalization" agreements would be spared double taxation. This would be a strong disincentive for Korean, Japanese and American investors. If Hyundai says "no thanks" and takes its jobs elsewhere, blame it on Škromach and ČSSD's love affair with the Communists. [Czech Republic universal health insurance KSČM]