At the elections to the National Assembly in 2022, Slovenians had to decide whether they wanted more or less state, higher taxes or lower taxes. In a fit of hysteria, they chose higher taxes and more state. Namely, 400 thousand people chose Robert Golob, who had already promised them higher taxes before the elections and told them in no uncertain terms that he would repeal Janša’s income tax reform, which increased net wages for all Slovenians. The results were predictable and are clearly visible today in the figures: as the Slovenian Press Agency (STA) reports, Slovenia is facing one of the biggest increases in its tax wedge among all OECD members.
After two years of decline during the COVID-19 pandemic, the tax burden on wages in OECD countries rose for the third year in a row last year. The tax wedge, or the share of the burden of taxes and social contributions in the total cost of work for a single worker, rose in just over half of the OECD states, but most markedly in Italy and Slovenia.
A diametric contrast in approach to tax policy compared to the Janša government
The Prime Minister promised to raise taxes during the election campaign already, explaining that he himself did not need lower taxes because if he were to get even more money, he would just spend it on stupid things.
He has delivered on his promise, to the chagrin of the entire working population. Not only that, but when we compare the performance of the governments of Janez Janša and Robert Golob, we find that under the latter, some taxes and contributions have also risen (or will rise). A review of the new burdens introduced by the current government shows a fundamental conceptual difference between the previous and the current government. Janez Janša’s government tried to reduce financial burdens, while Golob’s government is actively increasing them.
Lower taxes are for nonsense
Let us turn for a moment to the infamous pre-election promise to raise taxes. That is to say, the future prime minister, brought up as the son of a power plant manager, with an annual income of three million euros (half a million of which came only from state salaries), did not understand very well at the time what the people would gain from lower taxes and higher net wages, and even cynically remarked that money does not bring happiness.
“This is my experience and my personal opinion – we really don’t need lower taxes,” Robert Golob stressed, adding that he really doesn’t see how he would benefit from lower taxes. “Except to have more money in my bank account and spend it on maybe more stupid things,” said – completely without feeling – someone who, judging by the photos on Instagram, can easily afford prestigious trips and holidays on boats.
Interestingly, when he made such sweeping statements, some still came to his defence, saying that the statement was taken out of context. If someone says that more money would do him harm rather than good – because he would only be wasting it on more nonsense – there is no context that could show him in a different light. Many people in Slovenia work all day and barely get by from one month to the next, and then Golob comes along and declares that more money in the bank account is of no use?! Maybe not for him, because in all likelihood, he has accumulated so much that he does not know where to put his money anymore. And yes, we believe that money does not bring happiness – but you have to have at least a million in your account to take that view. Golob is making a fool of ordinary people.
Attack on welfare
The Golob government has repeatedly cut net wages – starting with the abolition of the Janša income tax reform (stealing the amount of one wage from the average Slovenian), and adding to the salary burden with supplementary health insurance. At the moment, we can look forward to an increase in the healthcare contribution (which is already attached to gross wages), the introduction of a long-term care contribution, the introduction of a property tax, increased network charges, and even ideas of such exotic taxes as dog taxes and taxes on all property are said to be circulating in government circles.
Taxes have already been raised on some “sinful” products (for example, sugary drinks – these are “regressive” taxes that hit the poorer people, making every glass of drink more expensive, which is not felt by those on higher incomes, or they at least feel it a lot less). Sole proprietors with normalised expenses with annual incomes of more than 50 thousand euros are also earning less than before Golob. Meanwhile, the Ministry of Finance has a proposal in the pipeline to make the working conditions for sole proprietors with normalised expenses even worse.
So, Slovenians are getting their wish – even according to the measurable OECD data. They have less to spend on “nonsense”.
I. K.
