Unions: Raise tax-exempt income, compensate with property and profit taxes
The Estonian Trade Union Confederation presented its proposals on Friday to the parties currently negotiating a new coalition. Among other things, the unions suggest to set the level of income-tax exempt earnings at 66% of the minimum wage.
The proposal suggests to regularly raise the rate of income exempt from tax, and to keep it at around 66% of minimum pay, the conferederation said in its letter to Center Party chairman Jüri Ratas, Social Democratic Party chairman Jevgeni Ossinovski, and IRL chairman Margus Tsahkna. The unions suggest compensating up for reduced tax revenue with property and profit taxes, a higher income tax rate, or an additional tax bracket.
The way unions see it, the main tax burden is increasingly carried by the people working for median wages, while median pay is barely enough to provide a worthy living standard to a family. The situation is even more difficult for that half of the workforce who earn less than the median wage, the confederation’s chairman, Peep Peterson, explained in the letter.
Minimum pay currently stands at €430, and the tax-exempt income is set at €170 a month, which is 40% of the minimum wage.
The unions also support the elimination of the social tax minimum requirement in order to promote part-time work. This minimum is the lowest required contribution for a worker to access Estonia’s state social benefits.