Final Word from Tuesday, March 10, 2009
One of the biggest achievements of the "public-private partnership" between government and business was the introduction of caps on social-security and health tax. The caps erased a big competitive disadvantage and enhanced the attractiveness of Prague and Brno as headquarters for companies involved in hi-tech, research & development and other sectors with high value-added. Without so much as a courtesy call for informing business leaders of its plans, the government of Mirek Topolánek is now talking about completely abolishing the caps. There are also reports that the change would be retroactive to Jan. 1, which would raise questions about the constitutionality of the decision. Abolishing the caps might be a good populistic move, but it would destroy considerable goodwill among business leaders. Businesses would grudgingly accept an increase in the cap from four times average wages to six for a limited period, but a complete abolition would send the wrong message to investors when they are needed most.[Czech Republic taxes high-tech]
Glossary of difficult words
caps on, caps off - meaning that the ceiling on social taxes was approved and might now be abolished (also an allusion to the "caps on" key on a keyboard for writing in capital letters);
public-private partnership - usually a business venture operated through a partnership of government and private-sector companies;
to enhance - to intensify, increase or further improve the quality, value or extent of something;
courtesy call - in diplomacy, a formal meeting of a representative of a country to a head of state;
retroactive - taking effect from a date in the past;
goodwill - friendly, helpful or cooperative feelings or attitude;
grudgingly - reluctantly (but ultimately learning to live with it).