Final Word from Friday, February 6, 2004
Listening to leaders of KDU-ČSL and US-DEU explain why they failed to win a reduction in non-wage labor costs during coalition talks on Sun. is a lesson in political expediency. The two parties had said that lowering social taxes was a priority, but in the end the idea was dropped in favor of a slightly lower top VAT rate and "bribes" for families. Every economist knows the role that high social taxes play in suppressing jobs and scaring away investors, but most workers themselves have no idea how much they cost their employer. Lowering the taxes, which amount to 50% of wages, would go largely unnoticed by voters at elections. Business leaders who were counting on KDU or US to support growth by cutting the taxes will be disappointed. But to paraphrase Václav Klaus, they have only themselves to blame for failing to drive home the issue. social-security health insurance premiums