Ossinovski sees opportunity to increase Estonia's debt burden, property taxes
Jevgeni Ossinovski, chairman of the Social Democratic Party (SDE), which is in the process of forming a new government coalition with the Center Party and Pro Patria and Res Publica Union (IRL), found that in order to boost its economy, Estonia should increase its currently low debt burden as well as increase property taxes.
"Property taxes are very low — essentially nonexistent," business daily Äripäev reported Ossinovski as saying, adding that it was cheap to be rich in Estonia. "When seeking the fairest way to get additional income for investing into human resources, it is undoubtedly the increased taxation of wealth. One example would be land tax, approximately 68 million euros of which is collected in Estonia, which is approximately 0.3 percent of the GDP. It would be fair and effective to increase this tax burden; hitherto this has not been done primarily for political reasons."
Regarding the prospect of taking out loans for the state, the chairman of the SDE found that if the current situation would allow Estonia to take out loans at essentially negative interest rates, then whether the country’s debt burden was ten or twelve percent didn’t make much of a difference. "This of course only if something meaningful is done with the money," he added. "For example, we should increase investments into infrastructure."
In Ossinovski’s opinion, the preconditions for future growth were being created today, and there was no chance of the new government taking out too many loans as agreed-upon measures preventing such a scenario were in place on the EU level.
Chairman of the Center Party and likely next prime minister Jüri Ratas told daily Eesti Päevaleht that if he forms the new government, it will be willing to seek new solutions for key issues. “In my opinion it isn’t right that the Estonian state can’t take out loans for investment purposes,” he said, adding that, in his opinion, investments must be made to stimulate the economy and that the state’s contribution here should be greater.
According to Ratas, the tax policy of the new potential coalition had not yet been agreed upon, however he noted that one potential direction would involve low-income earners receiving a greater total of their gross monthly pay. "But it is too early to explain it all," he added.