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Solidarity my tax

Never, but never, in its modern history has Romania been blessed with a more inept Finance Minister, and Mr. Ionut Misa's latest statements on the draft 'solidarity tax' are yet another example of his inability to understand the kind the business he is in.
“This is a 2% tax (on the corporate payroll fund) that the employer has to pay so it could gain some sense of responsibility vis-à-vis the state budget,” blissfully said the Romanian Finance Minister, as if the non-important tax on profit and the adjacent taxes paid by businesses, small and large, to the state’s coffers didn’t exist. “And there is a European directive on the matter too,” added Mr. Misa, in an attempt to pass the responsibility onto the Social-Democrats’ resident evil, the European Union. It is amazing to have a finance minister that cannot comprehend that companies already have a responsibility towards the state budget in the form of: tax on profit, contributions to the state health and pension schemes, social welfare contributions, sick leave and annual holiday fund contribution, unemployment fund contribution, work-related accidents and professional diseases fund contribution, and payroll guarantee fund contribution.
In my opinion there is plenty of responsibility as well as solidarity there, and anyone that runs a business may legitimately ask the government to show at least the same degree of responsibility in how it spends someone else’s money.
This is precisely the point where the government’s logic fractures. Why should the private sector bear the burden of a 30% per year wage increase in the public sector that is not even remotely linked to an increase in productivity? Why should the private sector bankroll loss-making state-owned companies, which have become a financial heaven for political cronies, relatives, and mistresses? Why should hard working people in the private sector be forced to show solidarity with a government that is lost in irresponsible financial fantasies?
It is not clear now who is to pay the “solidarity tax”: state-owned and private companies alike; only state-owned companies or only privately-owned ones? Will the “solidarity tax” be paid by companies operating in more profitable sectors or industries or will it be bore by all? Will the “solidarity” be broken intro several tiers or will we have a single-tier solidarity?
Only two months ago, Prime Minister Mihai Tudose stated that “the solidarity tax is yet another debate that has been put behind.” At that time, the “solidarity tax” was supposed to be paid by people earning more than 10 times the average wage, at least this is how it was written in the Social-Democrats’ election manifesto. However, since then, most Members of Parliament got a significant wage increase that pushed their income well above the 10 times average wage threshold, so the tax was switched onto companies’ shoulders.
Mr. Misa is almost right in saying that the legal provisions are already there and there is some kind of “EU directive” on the matter. Directive no 2008/94/CE of the European Parliament and Directive no. 80/987/CEE of the Council, which have been implemented in the Romanian legislation through Law no. 200/2006, set the legal basis for a payroll corporate guarantee fund. Currently, the tax is 0.25% of the company’s payroll fund, and I wonder how on earth a Finance Minister cannot make the difference between 0.25% and 2% and still be there, in that job.
Then there is the moral question: if one wants “solidarity” he/she has to clearly explain which are the extraordinary circumstances that require social solidarity, who are the beneficiaries of the money given in solidarity by the donors, what are the moral bases upon which the beneficiaries may be entitled to receive the money given in solidarity and which are the actions that the beneficiaries will take in order to morally give back the solidarity shown to them. But Mr. Misa is not concerned with the moral issues of the solidarity and the statement that “90% of the money will go to the state budget to be spent according to the government’s needs and priorities” clearly shows that the 2% taken from companies have nothing to do with “solidarity” and it’s just a tax. Finally, I just want to say that showing “solidarity” is a defining manifestation of one’s free will and simply cannot be imposed upon. Without moral motivation and the consent of the contributor, Mr. Ionut Misa’s “solidarity tax”
is just fiscal rape.­­­

The interview is also available in our print edition of Business Arena.

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