Tax hikes in Estonia: no other options?
Following the resignation of Estonian prime minister Kaja Kallas, who is to become the EU's new foreign policy chief, the new cabinet under Kallas' successor Kristen Michal convened for the first time in Tallinn this week. One of the first decisions taken was to increase the income and sales tax. The national media are less than enthusiastic.
Support those who really need it
Instead of hitting the most vulnerable by increasing VAT it would be better to cut spending by making the universal child benefit means-tested, says ERR Online:
“Of course, everyone is happy to get money for nothing. But there's a big difference between how much a parent on the minimum wage needs 80 or 100 euros in child benefit and how much, say, a member of parliament who earns more than six times more needs the same amount. Hence the proposal: child benefit should be means-tested and applied for, not granted automatically. If child benefit were means-tested this would help to ensures that in particular the most vulnerable children from disadvantaged families receive support.”
Start with top salaries in the public sector
Postimees suggests a different approach to saving money:
“Public sector wages and salaries in the public sector are like a sacred cow and have remained untouched for years. ... At issue are the ministries and state authorities, their summer jaunts, the week-long budget debate at fancy resorts, the creation of a new ministerial post at a difficult juncture. ... The Estonian state has grown fat over the years, and the budget includes large expenditures that are not easy to reduce. ... Painful cuts in society are only possible if those making them also tighten their own belts. Civil servants must set a good example and cut top salaries in the public sector.”