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Stake of Greece’s snap elections: Taxation cuts to attract middle class voters

Taxation cuts for the middle class are top on the elections programs of the two parties racing to form the next Greek government: left-wing SYRIZA and conservative New Democracy. The stake of the snap election between the two main competitors for the government power is to attract voters from the middle class who paid the highest tribute in the nine years of the economic crisis. And this translates in lowering taxation – even though it is not clear where the missing revenues will come from.

Tsipras insists on the high “primary surpluses” his government managed during the last months. ND leader Kyriakos Mitsotakis is up to cut state expenditure in sectors like Health.

Hardly had Prime Minister Alexis Tsipras visited the president of the Republic on Monday afternoon to ask him to declare early elections and the dissolution of the Parliament, he rushed to Megaron Mousikis facility to announce his party program should he declared the winner on July 7.

Surrounded by top ministers of his cabinet like Finance Minister Euclid Tsakalotos and Labor Minister Efi Ahtsioglou, Tsipras heralded that “Greece is no longer a bankrupt country. We now have the opportunity to present to you our plan for the future Greece, not just for the few and elite, but for all Greeks.”

He said among others that he understands the anger and fatigue and disappointment of voters, and called on them to remember where Greece was four years ago. “Now Greece has an open path ahead, again, we can provide breathers to those who shouldered the burden during tough times.”

Taking the floor, Tsaklotos announced the plans for the next years:

-Reduction on prepaid tax by 50%.
– Gradual reduction of the first tax scale rate to 20%
– Abolition of solidarity fee for annual wages up to 20,000 and a reduction in scales for higher incomes
– Reduction by 30% in property tax for the medium term and by 50% for low and medium assets
– Reduction of income tax for permanent island residents (with up to 3,100 residents in total) and reduction of heating oil prices for mountain villages.
– Reduction of VAT rate of 13% to 11%
– Reducion of tax for farmers belonging to cooperatives
– Increase of write off rate to 150%.
– Fighting tax evasion through a continuing cross-checking of income tax returns and bank deposits.

Kyriakos Mitsotakis is scheduled to reveal his program including generous taxation cuts as well on Wednesday. However, has the details:

-Reduction of property tax ENFIa by 30% within two years.
-Introduction of an low tax rate for natural persons that will start at 9%, from 22% today.
-Reduction of the tax rate on business profits from 29% today to 20% in two phases, in order to find the necessary funds for new investments.
-Reduce dividend taxation from 15% to 5%, which mainly favors small and medium-sized entrepreneurs.
-New, progressive, tax scale with a much lower tax rate than the current one.
-Additionally tax free amount of 1,000 euros for each child.
-Reducing VAT, ultimately establishing two rates of 11% and 22%, from 13% and 24% today.
-Gradual abolition of the trade fee and the special solidarity levy.
-A new 120-installment arrangement for all citizens who have overdue debts to the tax authorities and the insurance funds.
-Favorable taxation of agricultural collective schemes at a rate of 10%.
-Suspension of VAT on building activity for three years to support the real estate market.
-40% – 50% tax deduction for all works related to energy, functional and aesthetic upgrading, maintenance and utilization of existing properties.
-Suspension of capital gains tax, tax on real estate gains tax, for three years and review from zero basis in the fourth year.
-Tax incentives for companies that invest in, such as overpayments, doubling profits, clearing tax residence, and strengthening the golden visa program to attract capital and foreign investors.

In this sense, I see that not only left-wing Tsipras will defy the country’s lenders but also the conservative and neo-liberal Mitsotakis.

As for us, little do we care. We live happily ever after since we will see our incomes double and triple due to the taxation cuts. Or not?

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