The Social Democrat leadership has drawn up a list of 15 coalition agreement amendment proposals, with an idea of doubling the tax free minimum monthly rate to 400 euros.
Reopening the coalition agreement is a move by new SDE leader Jevgeni Ossinovski, who was vocal on the three-party coalition in the first place, and was left without a ministerial position.
University of Tartu political scientist Rein Toomla said a wish to show themselves more to the public may be behind the proposals, or a first step in breaking up the coalition, or just to pressure IRL and the Reform Party, the other two coalition members.
“To sum it up, Jevgeni Ossinovski, as a head of a party, is not part of the government and this is a fairly exceptional case in our political history,” Toomla said.
Besides increasing the tax free minimum, the sum in a person's monthly income which is not subject to income tax, the proposals aim to tackle urbanization with support for electricity and communications' network expansions, moving some state offices out of Tallinn and offering work-from-home plans for state officials. The proposals also include limiting political campaign expenditure, with the Social Democrats usually the thrifty of the four large parties, when it comes to election campaign spending, and an additional audit to state bureaucracy.
Ossinovski said increasing the tax free minimum rate would cost the state 400 million euros, which could be found by increasing the income tax rate by 3-4 percent.
IRL and the Reform Party have signaled willingness to talk, but both remain skeptical on the tax free minimum issue.
“To propose as fundamental political decision – it is a brave move,” IRL Deputy Chairman Marko Mihkelson said.
Hanno Pevkur, Mihkelson's Reform Party counterpart, and a government minister, said the Social Democrats did not push the tax free minimum issue at the initial coalition negotiations, and it was the Reform Party's idea to increase the rate in the first place, although by a far smaller percent. The rate was 144 euros per month in 2014, increasing to 154 this year and going up to 205 euros.
Pevkur said the Social Democrats have also arrived at the conclusion, adding that he is yet to see financial cover for the idea.
Editor: J.M. Laats