Final Word from Monday, November 21, 2011

A group of "Patriotic Millionaires for Fiscal Strength" is demandinga new tax rate of at least 39.6% in the U.S. for annualincome over $1m. Few Czech multi-millionaires would standup and demand a higher tax rate for themselves, but theymight get one anyone, without doing anything. Not only isTOP 09 starting to talk about a new marginal tax rate for therich if there is a real financial crisis, but the new holding periodof three years for the tax-free sale of securities (insteadof six months) will predominately affect the rich too. Therehasn't been much opposition to this, but for people who can'twait three years, it will mean a higher tax burden. There's alsothe matter of all this anti-corruption talk. If Andrej Babiš succeedsin bringing corruption down to the "normal" level thatexisted before Mirek Topolánek became prime minister, therich will have more leftover income that can be taxed. Insteadof paying a "tax rate" of 15-20% directly to politicians, they'llpay a more reasonable bribe of 5-7%, and tax the rest.

Glossary of difficult words

marginal tax rate - the rate that applies to the last amount of income earned;

leftover income - in this case, income available after unofficial "taxes" are paid.

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