ERR News poll: Progressive income tax popular (1)
Close to a third of ERR News readers would like to introduce a progressive tax system in Estonia, while slightly fewer readers would leave the system as it is.
Banker Indrek Neivelt opened the debate on tax reform in Estonia at the beginning of the month, with politicians and experts weighing in, saying changes are necessary after two decades of stability.
The ERR News poll showed 31 percent would like to see a progressive income tax introduced. Estonia has long been one of the only nations with a flat tax rate and many hold Estonia's tax system as the main reason for the fast economic growth around the turn of the century. 27 percent of respondents said as much, preferring to keep the system as it is.
A tax on corporate profits received 18 percent of the vote. Estonia currently does not tax company profits but only dividends taken out of the company, making investments cheaper but also easier for foreign internationals to transfer profits abroad untaxed.
Increasing the tax free minimum, which the government has pledged to do, was also popular, with 17 percent of the vote. The current rate is 144 euros per month, with all political parties supporting an increase. IRL has gone the furthest, promising a 500-euro tax free minimum.
The less popular ideas were a sugar tax and increase in excise duties (5 percent), and restoring a land tax on homes (2 percent).
The debate is likely to continue ahead of the parliamentary elections in about 100 days.
ERR News asked its readers what would they change in the tax system:
31 percent – introduce a progressive income tax
27 percent – leave the system alone, Estonia has done well with it
18 percent – restore the tax on corporate profits
17 percent – increase the tax free minimum to at least 400 euros
5 percent – increase excise duties; introduce sugar tax
2 percent – restore land tax for homes
A total of 184 people took part.