Is PO working?

I know I sometimes have a lot to say about our friend at PiS, his brother and other people but it’s important to have some balance so today the question is simple – are PO actually doing anything?

PO’s broken promises

Education Minister Katarzyna Hall yesterday admitted that her flagship project to send six-year old children to school will be postponed. This is another election promise, after the health sector reform and the prohibition on hitting children, Civic Platform (PO) has failed to execute as planned. (Dziennik, p. 7)

Pan Tusk & Co have been in power for just over a year now and support for them is still high (not difficult given the alternatives!). They promised various wonderful things before they were elected but are they actually making progress in delivering them?

“We are afraid that it is all about public relations, as has often been the case with the PO government, showing bags under Donald Tusk’s eyes, tired from working on the legislation, and nothing more,” PiS deputy Mariusz Błaszczak told a press conference in September after the legislative offensive had been announced.

Marek Migalski, a political scientist at the University of Silesia, held a similar opinion. He said that the fact that bills were introduced in the Sejm as late as this autumn, rather than at the beginning of the year, showed that PO had not been prepared to keep its promises when it came to power last year and testified to the legislative push’s character as a PR move.

“The first year of PO’s leadership was certainly disappointing, especially for its own electorate,” said Migalski. He added that the party had neither fulfilled its economic promises, nor had it had any significant success in the field of foreign policy.

According to the Business Centre Club (BCC), which claims to be the largest organization of private employers in Poland, the PO-PSL government has so far fully or partially realized just 28 out of 172 draft bills presented by either Economy Minister Waldemar Pawlak or PO deputy Janusz Palikot’s “Friendly State” commission. According to the BCC, that’s a 16 percent success rate so far.

“One year of the PO-PSL coalition being in power shows that the government is not, and will probably not be in the future, the bringer of the ‘economic miracle’ which PO promised,” said a special BCC report earlier this month. “It is obviously not true, as its political opponents both inside and outside Parliament claim, that the government has not done anything and is not fulfilling its election promises. But the pace of change, especially in the economy, is too slow,” the report added.[Text from here]

We’re all wise enough to expect at least half of what a politician promises to be a load of old testes but they really do need to make progress on a few issues at least. Any party can survive a year by doing nothing and thereby not upsetting anyone but coming into year two that tactic won’t work anymore. Now they have to actually start delivering things.

Here’s the original list of TO-DO items for Tusk & Co:

Civic Platform’s election promises

1. We will speed up economic prosperity and take advantage of it.
2. We will significantly raise pay in the public sector and increase pensions
and social benefits.
3. We will build a modern network of freeways, expressways,
bridges and bypasses.
4. We will guarantee free access to medical care and abolish
the NFZ (National Health Fund).
5. We will simplify the tax system – we will introduce a flat tax
with a pro-family relief and abolish over 200 administrative fees.
6. We will speed up the construction of stadiums for Euro 2012.
7. We will quickly complete our mission in Iraq.
8. We will encourage Poles who have emigrated to return home
and invest in Poland.
9. We will raise the quality of education and improve access to the internet.
10. We will take up a real fight against corruption.

How many of those can we say are 25% completed (the amount of their term they have already used up)?

I can attest to the fact that the tax regulations changed as I’ve already received my first payment of the year and that was deducted at 18%, so in respect of income tax they have done something. Not a flat rate as promised but better than nothing.

If you enter “Poland withdraw Iraq” into Google you get an amazing array of dates by which this country was going to get out from 2004 through to October 2008. As far as I know it hasn’t happened yet although I do recall hearing something about even more troops being sent to Afghanistan!

Speed up stadiums for 2012….tee hee….we all know how close we came to losing the tournament altogether.

The other points…..?

Is anything good happening on ul. Wiejska?

I predict Pan Tusk & Co have until spring, summer maximum, to really start delivering the goods. As this recession bites further into Poland, as unemployment rises, as more promises are broken and strikes organised (like the healthcare people right now) this country’s attitude towards PO is going to shift quickly from the original excitement and current ambivalence to something altogether more negative and irreversible.

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44 thoughts on “Is PO working?

  1. Brad Zimmerman says:

    Solid post. PO can and should be doing more …but I will nonetheless be grateful that PiS is no longer in power. If PO does nothing else than to stay in power and keep control from PiS then they will have done quite a lot for Poland.

  2. pstradomski says:

    The reform that lowered the taxes comes (as far as I know) from PiS times, it only became effective now.

  3. guest says:

    slightly off topic, but interesting.

    http://www.zpwb.org.uk/en/Current_Matters

  4. Ewa P. says:

    In fact, most of the people I know didn’t really expect very much of PO. They just hoped, that the circus would stop. And our dear president aside, it did. This is already something.

    If they do anything _reasonable_ else, it is a bonus.

  5. Sylwia says:

    Goodness! The Brits are impossible! They’re even ready to remember what politicians said and expect them to fulfil their promises. It must be hell to be a politician in Britain.

    Seriously. No one believed in PO’s promises. We chose them because we began to believe that PiS could fulfil theirs!

  6. scatts says:

    Nobody expected anything from PO, they just wanted to get rid of PiS….hmmmm.

    I wanted to get the circus out of town too but I did at least expect the new boys to do something. No wonder this place is a mess! ;)

  7. Sylwia says:

    I told my boyfriend about your expectations and you have him seriously worried. Do you have any idea how difficult it’s to outdo things once the politicians do them? :O

    I don’t know if we can tell whether they’re working or not at this point. Their original plan was to prepare many of the new legislations at once and late in the year so that Kaczyński wouldn’t have much time to forestall them. On the other hand the things that are the most important are the most difficult to change. Some of our current problems come from the fact that changes have been sufficiently blocked in the parliament for all these years. The high taxes were to be only a temporary solution after 1989, but every time a party wanted to lower them they were outvoted. Today PO wants lower taxes, but their partner in the coalition doesn’t. Both PiS and SLD would vote against them too. PO could make a flat tax only if they had the majority in the parliament.

    I think that in general the Polish and British parliaments differ in their respective freedom of action. In Britain they’re more free to rule once they won the elections, in Poland they’re still controlled by others, because they’re still in a minority. So we have to be realists when listening to their promises. It’s clear that they won’t be able to fulfil some of them unless they win over 50% of the seats, and they haven’t.

    The 18 and 32% taxes were PiS’s proposition, but they did it because they wanted to show that they wanted lower taxes just as PO did but on their own terms, and they managed to do it, because PO supported them, as they’d support anyone who’d propose lower taxes. It won’t happen in a reverse situation.

  8. Boguslaw says:

    @sylwia
    “The high taxes were to be only a temporary solution after 1989, but every time a party wanted to lower them they were outvoted.”

    Well, you like to pretend to be expert from everything, but you should better get your facts straight rather than making a fool from yourself.

    Poland has one of the lowest taxes in UE, much lower from that what guys have back in UK. Have a look.

    http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

    Overall tax revenue as a percentage of GDP in 2008 was 34.4 percent. Well, maybe thats why German and French are accusing Poland for social dumping.

    Furthemore its not true that every propose of tax cuts had been outvoted – only those stupid ones. Polish last centre-left government lowered corporate tax which was good and president Kwasniewski blocked idiotic proposal of flat tax made by Leszek “free-market cheerleader” Balcerowicz which was even better. Perhaps we should explain to our foreign readers what was all about. So, we have right now three rates of progresive income tax – 19%, 30%, 40% which is something completely normal in civilisised world. Besides, tax breaks are making those taxes even lower – 13%, 25%, 35%. The most improtant thing is that roughly 95% of Poles is in the first bracket (19>13%), 4% in a second (30>25%) and 1 in a third (40>35%). But still, some people believe that we have one of the highest taxes in Europe. Those people have their own Guru – mr. Balcerowicz. When he was minister of finance he proposed to implemented flat tax at the rate of 22% – without any further tax breaks. You know, a genuine, clean flat tax. Believe it or not, he called that move a tax cuts…And what is more, some people did actually believe him.

    That “tax cuts” would lead to raising taxes for 95% of polish citizens, those from the first bracket, and lowering for only 5%. Of course those on the top would profit the most. Mind you, i really dont mind high taxes – i love Scandinavia ;) – but we should look at the tax system as a whole, and I am affraid that this move would be the most arogant thing from all those things that had been implemented during transformation. Let alone that flat tax is a rubish.

    @sylwia
    “Their original plan was to prepare many of the new legislations at once and late in the year so that Kaczyński wouldn’t have much time to forestall them.”

    I belong to those Poles who dont support neither PIS nor PO – which is called by us PIS light ;) I am social democrat and i find those two parties being parochial right-wing rather than european centrist. The same goes to their core voters, you mean, fanatics, hools, people who blame Tusk or Kaczynski for everything, depending to which tribe those people belong. But i have to stressed that i am sick and tired listening to this constantly excuses made by PO core voters that Kaczynski is a pure evil, and PO is just an innocent victim of his moods. Come on! During campaign PO claimed that they have plenty of legislations ready in their pockets, where their all gone?

    @sylwia
    “The 18 and 32% taxes were PiS’s proposition, but they did it because they wanted to show that they wanted lower taxes just as PO did but on their own terms, and they managed to do it, because PO supported them, as they’d support anyone who’d propose lower taxes. It won’t happen in a reverse situation.”

    Well, for those of us who dont support none of them, and believe me, contrary to the opinion polls we do exist ;) it is just another prove that PO is just a PIS light, only difference is that they tend to pretend better. But it is very funny to read as some PO hard core followers try to turn every possibly argument into the explanation that whatever PIS is doing it is because they are pure evil, and whatever PO is doing because they are fighting with evil. I must say that PIS hard core voters are acting in very similar way.

    Symptomatic.

  9. Sylwia says:

    @Boguslaw: “Poland has one of the lowest taxes in UE, much lower from that what guys have back in UK.”

    Perhaps there’s something I don’t understand about the UK income tax, but here’s my very amateurish calculation:

    A Brit who earned £6,035 last year will pay 0% tax, a Pole will pay 19%, or exactly 6,035 x 4,48 = 27,036.8 zloty x 19% – 586.85 zloty = 4,550.14 zloty. So a Pole pays over Ł1,000 when a Brit pays nothing. I think that in the UK they’d call taking so much money from someone who can barely support oneself a robbery! At what income does it give you 13%, I wonder?

    A Brit who earned £34,800 will pay 20% tax, a Pole will be in the 40% rate. The tax from income 155,904 zloty is 7,866.25 (the 19% rate) + 20,177.65 (the 30% rate) + 28,150.4 (the 40% rate) = 56,194.3 zloty or Ł12,543.37 while a Brit will pay Ł5,753 – over twice less. Even after the recent tax reduction to 18% and 32% respectively a Pole will pay more than the Brit – 37,359.34 zloty or Ł8,339.14.

    I don’t remember the details of Balcerowicz’s plan from the late 1990s, but I recall that it was more than just the flat income tax. It was a proposal of a general tax reform, including VAT.

    VAT in the UK has just been temporarily reduced from 17,5% to 15%, while in Poland it’s 22%, and happens to be the 3rd highest in the EU.

    And yes, the tax revenue in the UK is higher than in Poland, so clearly higher taxes don’t pay.

    So before we count the money of the rich, and cry with all the envy that they should pay to the last penny, perhaps it’s good to ask oneself the question whether they are rich at all, how many things they can buy for the money they earn, and whether our poor paying 18% or even 15% tax will really be able to buy more stuff than the poor in the UK paying 20%.

    If people have more money they spend more, that makes more jobs, and that diminishes unemployment, so people and the country become richer. If you take the money from the only ones who could make a difference we all will be poor for ever.

    Frankly, I think that it’s totally unfair to make the best educated, working and effective people in this country to pay taxes from a larger share of their income in order to keep the rest. Flat tax makes the richest pay more anyway, but everyone should be charged equally.

  10. scatts says:

    You shouldn’t mix up a country’s tax income as % of GDP with personal tax levels. The GDP % is as much a measure of how well paid the citizens are than one of how highly they are taxed.

    This (how highly they are paid) also drives the personal allowances and the change from one level of tax to another. In Poland, the thresholds are very low because the majority of people are poorly paid. This is fine for the majority but anyone who is “well paid” ends up reaching the highest level of tax very quickly as compared with the UK, for example, and therefore the total tax paid by those people is (or was at least) very harsh.

  11. […] discusses whether Polish Prime Minister Donald Tusk and his governing party, Civic Platform, actually have […]

  12. Boguslaw says:

    Sylwia and Scatts.

    Nice, but you have completely omitted power purchasing parity, in fact life in Poland is much cheaper than in UK, that is why thresholds are at the lower level than those in UK. I do understand that people who have not a clue about taxes are those who whine the most about oppressivenes of taxation but you should be more carefoul because you might look like an ignorants.

    @sylwia
    “VAT in the UK has just been temporarily reduced from 17,5% to 15%, while in Poland it’s 22%, and happens to be the 3rd highest in the EU.”

    Once again you have omitted fact, that there is plenty of exceptions, and VAT sometimes is at the level of 0%, 3%, 7%.

    @sylwia
    “So before we count the money of the rich, and cry with all the envy that they should pay to the last penny, perhaps it’s good to ask oneself the question whether they are rich at all, how many things they can buy for the money they earn, and whether our poor paying 18% or even 15% tax will really be able to buy more stuff than the poor in the UK paying 20%.”

    Well, instead of repeating those hackneyed banals about envy and the vulnerable rich you should better once again take a look at the UK where top of the income tax has been raised from 40% to 45%. Nice ;)

    Like i said, contrary to the conventional wisdom, life in Poland is still much cheaper than in UK. Compare price of bread, costs of renting a flat and car insurance. Pole in UK who lives alone in a small cage, i mean studio, and pay considerable amount of his/her money for the food and rent is a very good example that is not so easy to make some savings even in UK.

    @sylwia
    “If people have more money they spend more, that makes more jobs, and that diminishes unemployment, so people and the country become richer. If you take the money from the only ones who could make a difference we all will be poor for ever.”

    Well, if this is so simple, so why western european countries are not doing this. Brits are raising income tax for the super-rich, nordic countries still taxed the most, Germans and French dont even think about tax cuts and so on. Moreover, i am affraid that what have you just written is not working in South and Latin America either. They have plenty rich people and very low taxes as well, but still Latin/South American poverty is among one of the most destructive in the whole world. Do you like that?

    Your ideology is very outdated. Read about George W. Bush and his tax cuts during his cadence. He cut taxes three times. Richer profited the most, poorer get only a slighty tax cut. He was insisting, just like you, that we cant take money for those who already have, and by giving the rich tax relief we are giving an economy a strong impact. Well, like many great economist – Paul Krugman for instance – point out, such tax cuts not working, because the rich will not necessary spend those money, beacause they have already almost everything, instead they will invest those money in some banking savings or financial operations, or they will start consume in luxury which often comes from import. But the most destructive fact is that the budget is loosing considerable amount of money, which everyone tends to forget. So, at the end we are facing increasing of deficit, just like USA are facing today after Bush tax cuts. This crass market liberalism is not working, being just another form of populism. It is not so easy, that if only people will have more money they will spend more, and so on, because simultaneously to this, budget is loosing money ergo education, health care as weel as social benefits are at the risk of being destroy.

    If you really want to cut those bloody taxes, cut those for the poorer, not those for the richer, because as life show us, the poor spend the most and the rich save the most.

    @sylwia
    “Frankly, I think that it’s totally unfair to make the best educated, working and effective people in this country to pay taxes from a larger share of their income in order to keep the rest. Flat tax makes the richest pay more anyway, but everyone should be charged equally.”

    If flat tax is so good, so why no one in western Europe has implementing it yet?

    Oh, wait! I have forgotten about Iceland. First country in the west with flat taxation – a bankrupt now.

    I see that you are against european taxation, preffering more South American ones. First of all, the richest are not necessary the best educated, working and so on. There is plenty hard working people who earn not much. Little more respect for those people. Second, if the rich are so great educated, so they have must been learning at the public university. So, state gave them opportunity, society paid taxes for they education and now, they have responsebility to pay taxes. Those richer are getting more benfits of the fact that state is working. Infrastructure, legal system, education etc.

    Progresive taxation is in the european spirit. Those who can, pay more. We have to look at the system as a whole, and in fact, poorer spend more of they income on consumption than those on the top. Vat tax is in fact a regresive tax, so flat tax would mean that poorer would pay more than reacher.

  13. Boguslaw says:

    @me
    “because you might look like an ignorants.”

    Ok, I have overreacted. I am sorry for that.

  14. guest says:

    Great entry Boguslaw.

    low taxes = cheap state (bad health service, crime, bad education system and so on.)

    Of course a British Businessman can hire a prvate police, a private doctor and live in a gated golden cage somewhere in Bombay or Sao Paulo for example. But i do not think that at the end of the day he will have a better life and more money in his pocket than a businessman in Warsaw, Vienna or Westminster who pays taxes for “sanepid” the gardners in Lazienki Park and other so called “meaningless” things….

  15. Boguslaw says:

    And one more thing

    @sylwia
    “A Brit who earned £6,035 last year will pay 0% tax, a Pole will pay 19%, or exactly 6,035 x 4,48 = 27,036.8 zloty x 19% – 586.85 zloty = 4,550.14 zloty. So a Pole pays over Ł1,000 when a Brit pays nothing. I think that in the UK they’d call taking so much money from someone who can barely support oneself a robbery! At what income does it give you 13%, I wonder?”

    Well, yes it is very amateurish. First of all we have indeed 4 tax rate of income tax. I have forgotten about bottom rate at 0% (0-3091 polish zloty)

    0 – 3091 — 0%
    3092 – 27,036.8 — 19% > 3962.66 polish zloty

    You cant say that a Pole will gona pay over Ł1000 because currency is changing and in a 6 months, who knows, one pound might cost 5,5 zloty or perhaps even 6 zloty.

    @guest at 11:09 pm

    Dzięki ;)

  16. scatts says:

    Boguś – apology accepted. On your other points I’d say the following:

    “..life in Poland is much cheaper than in UK..”

    I don’t think you can make such a sweeping generalisation. It certainly CAN be but it does depend on where and how you live. There’s no question that many things are quite considerably more expensive here than in the UK, especially if you live in Warsaw. I’m not just talking about luxury goods either, clothes for example = far greater choice, equally good if not better quality @ lower prices. I’m surprised you mention car insurance?? Try looking at life insurance!! Renting an apartment, again depends on where…certainly NOT cheaper in Warsaw, or any other major Polish city. DVD’s, CD’s, books, toys………….the list is endless and it is endless because in the UK there is FAR FAR more competition for every GBP and not everyone is as rich as many people here think.

    “look at the UK where top of the income tax has been raised from 40% to 45%. Nice ;)”

    That’s just simply not true. See here – http://www.direct.gov.uk/en/Nl1/Newsroom/Pre-BudgetReport2008/DG_172915 They have talked about raising it to 45% as from April 2011 for those earning more than roughly 60,000 PLN per month (roughly 1% of tax payers). That assumes Labour will win the next election and various other factors. My guess is that this will never be implemented. You obviously choose to assume it is a done deal because it suits your argument to do so.

  17. Sylwia says:

    Boguslaw: “Well, yes it is very amateurish. First of all we have indeed 4 tax rate of income tax. I have forgotten about bottom rate at 0% (0-3091 polish zloty)

    Look again at my counting, and then again if it still doesn’t help.

    “Nice, but you have completely omitted power purchasing parity, in fact life in Poland is much cheaper than in UK, that is why thresholds are at the lower level than those in UK.”

    I think the only reason for the Polish thresholds being so low is that some populist governments argued that those are taxes for the richest. The 40% rate threshold remained frozen at 74,048 złoty between 2001 and 2006 when SLD was in power. During a similar previous period it nearly tripled from 24,800 złoty. If it kept rising at the same pace it’d be around 220,000 by now, and not 85,528 złoty as it is. How much the prices of fuel, cigarettes, or bread grew in the meantime?

    “Once again you have omitted fact, that there is plenty of exceptions, and VAT sometimes is at the level of 0%, 3%, 7%.”

    And sometimes VAT in the UK is 0% or 5%. Nothing missing here. And yes, let’s not forget about the life and health insurance tax. In England it’s 11% in Poland ca 24.21% on an employee’s part.

    “Pole in UK who lives alone in a small cage, i mean studio, and pay considerable amount of his/her money for the food and rent is a very good example that is not so easy to make some savings even in UK.”

    Sure, but unlike in Poland no one makes them pay 30-40% tax. Not to mention that you’re comparing a plumber or nanny in England to a doctor, teacher or middle manager in Poland. People who went to UK and found a good job have their own houses and cars. It’s likely that they’d never achieve here what took them just a couple of years there.

    “Those richer are getting more benfits of the fact that state is working. Infrastructure, legal system, education etc.”

    I can’t imagine how the richer benefit more from infrastructure, and especially, the legal system than the poorer. Unless your argument is that a poor who ends up in prison doesn’t benefit from it, or that a poor who repeated a year innumerable times benefited from education less than a rich who finished a university. Infrastructure is covered from many other taxes. There are four different taxes in petrol for example. But you don’t understand that the richer will always pay higher taxes anyway. 10% of 7,000 is 700 zloty. 10% of 700 zloty is 70. Don’t tell me that flat tax makes people not pay for themselves in return.

    “Progresive taxation is in the european spirit.”

    I’m too old to be swayed by aesthetical arguments, so I don’t care what’s in European or South American spirit. Let’s remain pragmatic. Which of the post-communist EU countries doesn’t have flat tax yet? Poland, Hungary, who else? Germany is considering flat tax btw.

    “If you really want to cut those bloody taxes, cut those for the poorer, not those for the richer, because as life show us, the poor spend the most and the rich save the most.”

    The poor spend mostly on the things that have 0% Vat on them or are subsided by the country. They’re not the ones who boost economy. They’re the ones who live from a country’s charity. By your logic, we should take taxes only from those who are over 60 years old. They’re most likely to have everything already, and spend only on food and medicines, both subsided by the country.

    “Well, like many great economist – Paul Krugman for instance – point out, such tax cuts not working, because the rich will not necessary spend those money, beacause they have already almost everything, instead they will invest those money in some banking savings or financial operations, or they will start consume in luxury which often comes from import.”

    Are you really comparing an American rich who pays like 5% tax to a Pole earning ca 7,200 zloty a month?

    “But the most destructive fact is that the budget is loosing considerable amount of money, which everyone tends to forget.”

    I don’t know about you, but I don’t live in order to benefit my country’s budget. I have better things to do with my money, thank you. People should be considered before the budget, and the budget should be for them and not the other way around.

    Anyway it wouldn’t lose from a flat tax, those are just urban legends that PiS and SLD supporters believe in. First of all our government earns much more from VAT than from the income tax. So it’s likely that the budget would gain. Second, perhaps you haven’t noticed, but many Poles have already switched to the 19% flat tax from dzialalność gospodarcza (proprietorship), and the country’s income from taxes didn’t decrease. There are also many people who earn money on “umowa o dzielo”, and they pay only half of the 19% income tax. A low and simple tax would ensure that more people would be willing to pay it instead of avoiding it at all costs. Third, if you think you can force the real rich to pay anything you’re naïve. Have you ever seen a list of top 1,000 richest Poles? How many of them do you think are Polish taxpayers? Aren’t you sorry to lose their money? They are no fools and they’ll never pay taxes here at such rates. Is it better to take 40% from a Pole earning 7,200 a month or 15% from one earning 100,000 a month? 100% of zero gives zero.

  18. Sylwia says:

    Scatts, Wyborcza summed up Tusk’s year http://wyborcza.pl/0,85995.html

    Some of your points are mentioned: the mission in Iraq is complete, the construction of stadiums for Euro 2012 did speed up, teachers are going to earn more, many of the administration fees are abolished, and Tusk promises the flat tax by 2011 and our readiness to switch to euro by 2012. Some other points like ending with obligatory conscription to army, dealing with pensions for teachers, and improving our international position are praised too.

    What Tusk failed with are the health and education system reforms, and the construction of freeways. It reminds me of Pochanke who said that Poles are genetically not capable of building roads.

  19. scatts says:

    Hurrah! The man’s a genius!! :)

  20. MaterialGirl says:

    They said, that they start to build gasoport.

  21. Steven Woodruff says:

    Not sure what I think of the job Tusk is doing. But any politician with the balls to freely admit to the media that he liked to smoke grass, has my respect and loyalty. Give him a chance, look at the maniac he is dealing with as President. My God, I wish Tusk could run for office in the US.

  22. Steven Woodruff says:

    And Sylvia let me let you in on a little secret about flat tax. Most Poles in the services industry, like painters, carpenters, anyone self employed that builds homes, like “tynk” , and many, many, others. don’t pay a dime of tax at all. When someone is building a home in Poland they look for these guys. The guy asks “do you need a receipt for this painting? And the Polish home builder says no I don’t. Then the guy paints your new home. And the Investor nor the painter pay a dime of tax. That’s the real Poland. wake up !!

  23. Sylwia says:

    It’s not a secret, Steven. Poles will do anything to avoid paying taxes. That’s why the country’s income from VAT is so much higher, because it’s the only tax many can’t avoid paying. Of course many still can and do. Everyone who has a company here knows where to buy invoices in order to lower one’s VAT and income tax. Our tax system looks well only on paper. A low and simplified tax could make them stop, but nothing else will.

  24. Steven Woodruff says:

    In 1995 the services tax for a carpenter was only 6%. (and they still did it)
    And NOW it’s no secret, we just blew it for everyone. LOL. 45 years of Russian occupation didn’t really MAKE the Poles do anything, what makes you think an American style (as in stupid) tax reform act will??

  25. Sylwia says:

    Oh that’s easy. People value their effort more than money. If the money is not worth the effort they’ll simply pay it. Of course the services tax was not the only tax a carpenter had to pay. By avoiding one one avoids all of them. Say a company might be even fine with paying VAT if they didn’t have to pay 30% income tax. If they manipulate their income to avoid the latter they’ll still avoid the former.

    One of the taxes Tusk’s government abolished is tax from donations. Remember that baker who donated bread to the poor instead of throwing it away? He had to pay so much VAT and income tax that he went bankrupt.

  26. Steven Woodruff says:

    What stinks in the US will stink in Poland times 15% inflation. In Poland, you are forced to either break the tax laws to survive as a carpenter, or take a job in Norway, Sweden, Holland ect… Not a fair set of options but reality since 1989.

  27. Boguslaw says:

    @sylwia
    “Look again at my counting, and then again if it still doesn’t help.”

    Well, i did it, and i see that you neither know polish tax sytem nor wants to admit it.

    @sylwia
    “In England it’s 11% in Poland ca 24.21% on an employee’s part.”

    Taxes for the health and social security system are in Poland at the rate of 36,6%. Though it is still lower than in many european countries.

    @sylwia
    “Sure, but unlike in Poland no one makes them pay 30-40% tax.”

    Perhaps beacause food, renting a flat and going out are much cheaper in Poland than in UK.

    @sylwia
    ” Not to mention that you’re comparing a plumber or nanny in England to a doctor, teacher or middle manager in Poland.”

    No. I am comparing a guy who earns minimal wage here and in UK. Its no wonder that Poles in UK to be able to save a little bit are forced to live with so many other Poles in one small appertment.

    Sylwia
    “People who went to UK and found a good job have their own houses and cars. It’s likely that they’d never achieve here what took them just a couple of years there.”

    It is simply not true. One should better said, that those people have their own credits just like people in Poland. But of course quality of life is higher in Uk than in Poland (except food and railways) let alone that they have nice progresive income tax.

    sylwia
    “I can’t imagine how the richer benefit more from infrastructure, and especially, the legal system than the poorer”

    I do believe you, but have a look.

    – osoba zamożniejsza angażuje proporcjonalnie (a nieraz i ponadproporcjonalnie) więcej wysiłków powołanych do ochrony jej zdrowia, życia i majątku;

    People who are more well-of involve more security forcece to protect them and their property. The poor have little to loose, middle class as well those on the top needs to more protection. Hiring private security is not the best solution, because there is more and more burgleries comited by them.

    – osoba zamożniejsza ma większą świadomość potrzeby dbania o stan zdrowia, a więc w większym stopniu korzysta z usług służby zdrowia, i to zwłaszcza na tym ponadpodstawowym, droższym dla budżetu poziomie;

    Being reacher makes you more aware of your health and fitness. Such people tends to profit from that by visitiing their doctors more often. Private health care is not a solution if you want to se a paediatrician or oncologist. What is more, if you you have a car accident you will get a medical support from the state. The same goes to accidents in the ski resorts, at the sea and in the lakes in Poland.

    – osoba zamożniejsza prędzej wyśle dzieci na studia, i to na studia dobre, a więc prędzej na publiczny UW, UJ czy PW niż do prywatnej Wyższej Szkoły Ekologii w Pszczynie (przepraszam mieszkańców Pszczyny);

    Good education in Poland = public education.

    – osoba zamożniejsza będzie więcej korzystała z dróg publicznych, będzie miała więcej i większych samochodów na osobę w rodzinie;

    Good infrastructure is indinspensable for making business as well as for going on vacation. Cars pollutes more as well as someone have to care about victims of car accidents. Why poorer have to pay for that, if they hardly ever use cars for long trips?

    – osoba zamożniejsza ma więcej do stracenia w wypadku konfliktu zbrojnego, a więc bardziej niż osoba uboga partycypuje w korzyściach z posiadania przez państwo sił zbrojnych;

    Well-of have more to loose, so state makes an effort to protect them more than poorer ones.

    – osoba zamożniejsza częściej korzysta z usług administracji publicznej;

    Better well-of tends to benefits more from existence of state administration.

    – osoba zamożniejsza częściej korzysta w rozmaitej formie z efektów pracy opłacanych z budżetu naukowców.
    itp.itd.

    People more well-of tends to benefits more from various effects of resarch and development which are sponsored by the state. etc

    Sylwia
    “Infrastructure is covered from many other taxes.”

    Not so many.

    Sylwia
    ” There are four different taxes in petrol for example. But you don’t understand that the richer will always pay higher taxes anyway. 10% of 7,000 is 700 zloty. 10% of 700 zloty is 70.”

    I am affraid that you are not able to understand a one simply fact that richer tends to use infrastructure more frenqently than poorer. No company can make businees without roads and so on. The same goes to well-of who uses roads constantly. In that case they should pay relatively higher taxes.

    Syliwa
    “Don’t tell me that flat tax makes people not pay for themselves in return.”

    Well. Not quite. If you earn 1 000 zloty, you spend for a essential consumption most of what you have earned. If you earn 10 000 zloty, you will spend onf food perhaps 500 zloty, perhaps little bit more, even 1 000 is still relatively not so much, because you still have 9 000 in your pocket left.

    Flat tax is not only unfair but also uneffective. We have to know how much money is left after taxes for poorer and richer, beacause this decide about they purchasing power. 15% from 1 000 zloty is relatively more than 15% from 10 000 zloty. Poorer pay relatively more on indirect taxes than richer do. Indirect taxes are degressive, because of one of many economic laws – prawo malejącej stopy konsumpcji wraz ze wzrostem dochodu ( i cant translate this right, but the meaning is that the more you earn the less part of your earnings spends on consumption, instead that, you accumulate your wealth.) Like i said, those who earn 1 000 spend in fact most of that on consumption, paying in VAT tax about 15-20% of their earnings. Those who earn 10 000, and spend even 2 000 zloty, pay for VAT about 3% of their earnings. Progresive income tax, with higher top rate allow to reduce degressiveness of indirect taxes. Power purchasing of poorer is lower than those reacher, in that case flat tax move tax burden from reacher to poorer. Flat tax also mean that budget has fewer money,and that leads to cuts in government spendings, which tends to hit poorer more than reacher. Shorter list of drugs that will be refundate, more expensive education and so on.

    That is why civilised countries dont do that, but i think that you will not understand even that.

    Sylwia
    “Let’s remain pragmatic.”

    First of all lets remain logic and try to follow the facts.

    Sylwia
    “Which of the post-communist EU countries doesn’t have flat tax yet? Poland, Hungary, who else?”

    Well, first of all we should ask, which of western countries have taxes, and why no one implemented it so far? Russia have flat tax, USA dont. Is that mean that Russian have more fair and better tax system than Americans?

    Your hackneyed arguments also shows that you have completely lost the plot. Flat tax is not working even here. Latvia is a bankrupt now, and to save their economy they are planning to raise taxes. That is mean bye bye to flat tax in Latvia.

    http://gospodarka.gazeta.pl/gospodarka/1,33181,6058675,Szwecjo__prosimy__zajmij_Lotwe.html

    There is very simmilar attitude in Estonia right now as well as in Lithuania. Inlation is hitting its peak and GDP is moving backwards.

    Slovakia has still higher unemployment than Poland, what is funny, unemploymet rate has hardly moved there since implementing flat tax.

    In Czech republic few months ago 1 milion of Czechs went on strike wich mean that 10% of population had been striking against, among others, flat tax. What is more, Communist reached 15% in opinion polls, and socialdemocrats 42%. Czechs liberals are weak as never before. Well, people are not happy with flat tax.

    Lets remain pragmatic and choose western eauropean road of progresive taxation.

    Sylwia
    ” Germany is considering flat tax btw.”

    Well, perhaps on your planet, but here in Europe Germany has progresive income tax. What is more, one of the reason why Merkel lost her advantage against SPD during campaign was a propose of implementing flat tax made by one of her close partners.

    Sylwia
    “The poor spend mostly on the things that have 0% Vat on them or are subsided by the country. They’re not the ones who boost economy. They’re the ones who live from a country’s charity.”

    This is utterly nonsense. Poorer spend most of they earnings on food, clothes, and other essential staff. By cutting taxes for them we are raisng their purchasing power. Thats why all advanced countries taxed reacher more than poorer. Its not an accident. But i see that you still insist that south american tax system would suits us more than western european. In that case, why Latin and South American countries with very low tax burden have such problems with poverty, and Nordic countries with so high taxes especialy for the Rich have one of the most competitive economies in whole world?

    http://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htm

    Sylwia
    “I don’t know about you, but I don’t live in order to benefit my country’s budget. I have better things to do with my money, thank you. People should be considered before the budget, and the budget should be for them and not the other way around. ”

    Lovely, but you are contradicting yourself. You are so illogic and chaotic that it is very difficult to explain you some essential facts. Better budget mean more effective state. Lets remain pragmatic. We all – perhaps even you – will gonna benefit from that simply fact. So yes, we should care about state budget just like we care about oureselves. We just have to find a balance. If not, we will still live in a such uneffective state. Egoism is not pragmatic.

    What is more, those money are not exactly all yours. Someone has to pay for infrastructure and so on, or perhaps you want to be a fare dodger?

    Sylwia
    “Second, perhaps you haven’t noticed, but many Poles have already switched to the 19% flat tax from dzialalność gospodarcza (proprietorship), and the country’s income from taxes didn’t decrease.”

    Well, looked that up. Its decreased after 2 years, that why “they” where looking for some other taxes to raise, and Gilowska raised tax on food from 3% to 7% as well as some other indirect taxes.

    Sylwia
    “There are also many people who earn money on “umowa o dzielo”, and they pay only half of the 19% income tax.”

    People work on “Umowa o dzielo” only because they have no choice. They nasty employers try to save as much as they can. Of course not always is like that, but still, it has more to do with exploiting a employees than with evaidng paying taxes.

    Sylwia
    “A low and simple tax would ensure that more people would be willing to pay it instead of avoiding it at all costs.”

    I guess Haiti has very low and simply tax system.
    Instead low and simply i would preffer a more transparent one.

    Sylwia
    “Third, if you think you can force the real rich to pay anything you’re naïve. Have you ever seen a list of top 1,000 richest Poles? How many of them do you think are Polish taxpayers? Aren’t you sorry to lose their money?”

    Well, this exactly one of those urban legends that PO “true believers” tends to believe. First of all, its not possible to pay taxes in one country and to live in another. Do you really believe that tax authorities are fools? There is so many laws and regulations that effectively make evaiding paying taxes impossible. For example, you have to prove, why you have so much money here in Poland, and you still dont pay an income tax here? If you want to send money from tax heaven to Poland you will have to pay a “fee”. Very, very high “fee”. When you cross polish border you are obligate to notify how much money you want to bring in to Poland. Tax authorities are not so stupid, and they have plenty cunning ways to make you pay that taxes ;)

  28. Boguslaw says:

    @Sylwia
    “Remember that baker who donated bread to the poor instead of throwing it away? He had to pay so much VAT and income tax that he went bankrupt.”

    You realy like urban legends, dont you?

    http://www.pit.pl/pages/i/2698.php

    The baker turns out to be a crook. He was NOT an innocent victim of polish repressive tax system, but just another cheater who like to blame taxes instead of his greed.

    “Kontrolerzy skarbowi uznali za wątpliwe wyjaśnienia pana Waldemara Gronowskiego dotyczące poważnych braków w ewidencji obrotu pieczywem, które miały związek z zaniżeniem należnych podatków. Wyjaśnienia te nie zostały należycie udokumentowane, a zdecydowana większość podmiotów wskazanych jako beneficjenci nie potwierdziła darowizn. Te, które oświadczyły że je otrzymały, nie potrafiły określić ich ilości. Akceptacja takiej praktyki oznaczałaby zachętę do praktycznie nieograniczonego unikania opodatkowania w obrocie pieczywem i byłaby krzywdząca dla licznych producentów prowadzących działalność charytatywną zgodnie z prawem. W rezultacie, kwota należnego podatku VAT od oszacowanej przez kontrolę skarbową wielkości darowizn przekazanych przez pana Waldemara Gronowskiego stanowi jedynie 6% kwoty ustalonej do wpłaty z tytułu podatku VAT i podatku dochodowego. Pozostałe 94% to zobowiązanie wynikające z tytułu niezaewidencjonowanej sprzedaży.”

    Most of those places where Baker, as he claimed, send his bread to, have never acknowledged receipt of this bread. Fact is, that he was selling his bread in black market.

  29. Boguslaw says:

    Hello guys (Scatts and Island)

    Why my first comment is awaiting moderation? Dont you think that this is a little bit unfair?

  30. Boguslaw says:

    Sylwia
    “Say a company might be even fine with paying VAT if they didn’t have to pay 30% income tax.”

    Why are you laying? Corporate tax is 19%. Small companies pay other taxes, which are quite lower than 30%.

    I am sorry guys, it is your blog, but i have to say it. Sylwia is not the most reliable source of information about Poland.

  31. island1 says:

    Boguslaw: Sorry about that, it’s not us. Comments are held automatically for approval by the WordPress system if they contain links. Since the majority of comments go through without us having to approve them we sometimes fail to notice when a comment has been held by the system, although we usually spot it within a few hours. We almost never delete or censor comments and certainly not comments such as yours.

  32. Boguslaw says:

    Island1: Ok, dzięki for response. Could be so kind and delete the one from “January 14, 2009 at 8:46 pm”. Thanks.

  33. scatts says:

    Boguslaw, I’ve approved the post that was held up in the system and deleted the other copy. Anything with a lot of @…. and full links is likely to be held up by the system thinking it is spam. Sorry we weren’t as fast as usual with approving it.

  34. Sylwia says:

    Well, i did it, and i see that you neither know polish tax sytem nor wants to admit it.

    Boguś, in your counting you subtracted the same amount of money twice, which convinces me that not only you can’t count, but also never really paid taxes in Poland. If you did that on your tax declaration the Urząd Skarbowy would be after you.

    Taxes for the health and social security system are in Poland at the rate of 36,6%. Though it is still lower than in many european countries.

    Look again at what I wrote: ON THE EMPLOYEE’S PART. Otherwise it’s still well over 40% (19.52% + 6.00% + 2.45% + 3.60% + 2.45% + 0.10% + 9.00% = 43.12%). It’s lower than where, UK?

    Anyway, that’s the tax that should cover health treatment, and not the income tax, so don’t confuse the two. People who earn more money are more likely to see a doctor privately. The poor certainly won’t do that, no matter what kind of illness they suffer from. Moreover, the idea that people should pay for health treatment and then not use it is ridiculous.

    Why are you laying? Corporate tax is 19%. Small companies pay other taxes, which are quite lower than 30%.

    I’m neither laying nor lying. If you would follow the discussion you would notice that the example in question referred to 1995. I’m pretty sure the tax then was at least 30%. It was 36% yet in 1998.

    Perhaps beacause food, renting a flat and going out are much cheaper in Poland than in UK.

    Poles living in UK don’t agree with your opinion that life in Poland is cheaper: 1, 2

    Latvia is a bankrupt now, and to save their economy they are planning to raise taxes. That is mean bye bye to flat tax in Latvia.

    Now you’ve convinced me that you can’t read either. The article you linked to clearly says that income tax will be diminished: “Łotyszom nieco ulżyć ma za to niewielka obniżka podatku dochodowego.”

    If you earn 1 000 zloty, you spend for a essential consumption most of what you have earned. If you earn 10 000 zloty, you will spend onf food perhaps 500 zloty, perhaps little bit more, even 1 000 is still relatively not so much, because you still have 9 000 in your pocket left.

    I’m afraid that in all of your educated reading you miss the point simply because you misinterpret the word “consumption”. It doesn’t refer only to eating food, that btw, has lower or no VAT on it at all, so actually those who spend more money on things other than food add to the budget more than the poor.

    All your other points are too ridiculous to even bother to discuss. Soon you’ll argue that women should pay higher taxes because they’re more likely to be raped than men.

  35. Boguslaw says:

    @sylwuś

    “Boguś, in your counting you subtracted the same amount of money twice, which convinces me that not only you can’t count, but also never really paid taxes in Poland. If you did that on your tax declaration the Urząd Skarbowy would be after you

    Oh dear, dear Sylwuniu. You have written:

    “A Brit who earned £6,035 last year will pay 0% tax, a Pole will pay 19%, or exactly 6,035 x 4,48 = 27,036.8 zloty x 19% – 586.85 zloty = 4,550.14 zloty. So a Pole pays over Ł1,000 when a Brit pays nothing. I think that in the UK they’d call taking so much money from someone who can barely support oneself a robbery! At what income does it give you 13%, I wonder?”

    As one can see, you have omitted 0% rate of income tax so called “kwota wolna od podatku” wich is between 0-3092 polish zloty. Your mistake was that you failed to notice that we pay 0% for earnings between 0-3092. You havent taken it into consideration when you were making those calculations.

    Your calculations:
    27,036.8 * 19% – 586.85 __ wich is wrong

    My calculations:
    27,036.8 – 3092 = 23944.8 * 19% – 586.85 __ wich is correct

    Its funny, but is clear that you have no idea how polish tax system looks like.

    @sylwunia

    “Look again at what I wrote: ON THE EMPLOYEE’S PART. Otherwise it’s still well over 40% (19.52% + 6.00% + 2.45% + 3.60% + 2.45% + 0.10% + 9.00% = 43.12%). It’s lower than where, UK?”

    Yeah i know what you have written, but my remark was reffering to something else, let alone that you have once again made a mistake.

    http://www.worldwide-tax.com/poland/poland_tax.asp

    As one can see you have mixed employer with employee. Employees pays 18,7% instead of 24,21%. What is more, like i have written comparing to other european countries, wich means not neccesery to UK, it is still quite average rate. The same goes to VAT tax. Poland is not in 3 positon, but in 4 as well as most countries have Vat tax at the rate of 21 or 20% wich is not so lower than in Poland, let alone that food is taxed in most of those countries either the same as in Poland or higher. For example in Czech and in Austria food is taxed at 10%.

    @sylwuń
    “If you would follow the discussion you would notice that the example in question referred to 1995. I’m pretty sure the tax then was at least 30%. It was 36% yet in 1998”

    In that case i am sorry.

    @sylwuś
    “Poles living in UK don’t agree with your opinion that life in Poland is cheaper: 1, 2”

    Really?

    sorry but you have only read first paragraph. No one denied that food or renting a car is cheeper in UK than in Poland, as well as i have never ever claimed that living in UK sucks. What is more your sweeping generalisation that “Poles living in UK dont agree with my opinion” is only a pretensious remark. Some Poles agree with me, other dont. But facts will be facts no matter what they say.

    @sylwuś
    “Now you’ve convinced me that you can’t read either. The article you linked to clearly says that income tax will be diminished: “Łotyszom nieco ulżyć ma za to niewielka obniżka podatku dochodowego.””

    Well, once again you have taken something out of contexct and manipulated.

    “Wzrośnie m.in. akcyza na paliwo, alkohol, papierosy czy kawę. Do góry pójdzie też VAT – wyższa stawka z 18 do 21 proc., niższa – z 5 do 10 proc. Dodatkowo część towarów zostanie obłożona wyższą stawką. To się nie podoba m.in. wydawcom prasy. W czwartek część łotewskich gazet na pierwszej stronie umieściła rysunek ukazujący “nekrolog prasy”, wzrost VAT na prasę z 5 do 21 proc. może zdaniem wydawców doprowadzić do ostrego spadku czytelnictwa. Łotyszom nieco ulżyć ma za to niewielka obniżka podatku dochodowego.”

    As one can see, Latvian are raising VAT tax from 18 to 21 and from 5 to 10 as well as duty on gasoline, alcohol, cigarettes and caffe. Slighty income tax cut (wich is more correct form than your remark about diminished) not means that flat tax will be preserve, on the contrary.

    But the point is that Baltic states are going down, so we dont have to follow them, dont change the subject and dont manipulate.

    Well, dont forget about Iceland too, one and only western european country with flat tax. Bankrupt now.

    @sylwia
    “I’m afraid that in all of your educated reading you miss the point simply because you misinterpret the word “consumption”.”

    Well, i have mentioned about food, because its the most common form of consumption. Everyone is doing this.

    @sylwia
    ” It doesn’t refer only to eating food, that btw, has lower or no VAT on it at all, so actually those who spend more money on things other than food add to the budget more than the poor.”

    Its not working like that. There is obviously more poorer people than richer, and when poorer start to consume more and more and their consumption will not only be confined to food, but also to lets say more “sophisticated” things like tv sets and so on, local economy will raise and develop. This is so called “kolo zamachowe” of economy. Companies will sell more things, wich lead to “i am affraid” paying more (not higher) taxes by them and who knows perhaps even to hiring more employees. More deamand leads to more supply which means more companies will be able to sell and offer more things. More new businesses will be able to start operating because people will be more willing to spend their money. Its a very simple mechanism wich is working in more developed countries.

    @sylwuś
    “All your other points are too ridiculous to even bother to discuss.”

    I see. Fact that Latin and South American countries have low taxes for the rich and still being undeveloped as well as the fact that eastern european states with flat tax have more and more problems with their economies, and of course fact that western european countries (except Iceland) have progresive income taxes and taxed richer definitely more than poorer, everything that means of course nothing. Also a fact that Bush tax cuts for the rich and slighty tax cuts for the poor have led to huge budget deficit and reinforced financial crisis as well as fact that Nobel prize winner Paul Krugman, as well as many other great economies, are calling for tax cuts for the poorer and raising tax for the richer are just too ridiculous for you.

    So tell me, why since end of the war advanced western states are taxing richer more than poorer?

    @sylwia
    “Soon you’ll argue that women should pay higher taxes because they’re more likely to be raped than men.”

    Ignorance is bliss.

  36. Boguslaw says:

    I know am making many language mistakes. One of them is “wich” instead of “which”. Sory for all of them. I promise to behave ;)

    btw

    Sylwia, taxes are not only confined themselves to an income, Vat and social security. There are plenty of other taxes that are either much lower in Poland than in other European states or just do not exist here. Have a look at british Council tax which is under strong criticism for being unfair and too high. Perhaps guys should explain us what they think about Council tax?

    Taxation in Poland probably should be more fair, which i believe it means being more progresive, but flat tax is just a dead end.

  37. Boguslaw says:

    @sylwia
    “Soon you’ll argue that women should pay higher taxes because they’re more likely to be raped than men.”

    For every reasoning man and woman such a statement is a pure nonsense, nevertheless i will explain you why your powers of reasoning are illogic.

    Raped women are still tiny minority of society, being victims of a crime. The richer uses infrastructure constantly, without which they would never had possibility to make their money or increase their wealth.

    In that case, there is no connection between thinking that we should taxed women because they are more likely to be raped than men and thinking that we should taxed richer more than poorer because richer are profiting form existing of the state more than poorer.

    btw

    I have missed few of you remarks.

    @sylwia
    “Anyway, that’s the tax that should cover health treatment, and not the income tax, so don’t confuse the two.”

    You are confusing me with someone else, i have never claimed that social security is part of income tax. Perhaps you should explain that to this guy who told you that German is considering a flat tax now.

    @sylwia
    “People who earn more money are more likely to see a doctor privately.”

    I have written that richer tends to not use private oncologists or paediatricians.
    Private health care in Poland is taking care only when treatment is essential and not complicated. Every more difficult treatment is treated by polish National Health Care.

    Sylwia
    “Moreover, the idea that people should pay for health treatment and then not use it is ridiculous.”

    Rich profits from the healthy society, because they are not subjected to disease that could have spread the poor who in other social context might not have afford for a treatment. Healthy society is a rich society. Everyone benefits from that simply fact, who knows, maybe even you.

  38. Sylwia says:

    Your calculations:
    27,036.8 * 19% – 586.85 __ wich is wrong

    My calculations:
    27,036.8 – 3092 = 23944.8 * 19% – 586.85 __ wich is correct

    Its funny, but is clear that you have no idea how polish tax system looks like.

    Goodness! Can you tell where 586.85 zloty came from? (Hint: 44 groszy in it is an effect of rounding up.)

    Employees pays 18,7% instead of 24,21%.

    I wrote circa 24.21% because I didn’t feel like double checking all of the elements, but here’s especially for you:

    9.76% (emerytalne) + 1.5% (rentowe) + 2.45% (chorobowe) + 9% (zdrowotne) = 22.71%

    No one denied that food or renting a car is cheeper in UK than in Poland, as well as i have never ever claimed that living in UK sucks. What is more your sweeping generalisation that “Poles living in UK dont agree with my opinion” is only a pretensious remark. Some Poles agree with me, other dont. But facts will be facts no matter what they say.

    You lost me here. What facts?

    About Latvia. Perhaps it hasn’t occurred to you but even after they raise their VAT it still will be lower than in Poland. I didn’t think it’s something worth the bother since it’s insignificant in comparison to us.

    Moreover, I’d suggest there’s a global crisis right now, in the West as well as in the East. It’s rather silly to blame it on tax system.

    You keep arguing that only a progressive tax will do us well. But we do have a progressive tax. Why then our economy stands so low?

    There is obviously more poorer people than richer, and when poorer start to consume more and more and their consumption will not only be confined to food, but also to lets say more “sophisticated” things like tv sets and so on, local economy will raise and develop. This is so called “kolo zamachowe” of economy. Companies will sell more things, wich lead to “i am affraid” paying more (not higher) taxes by them and who knows perhaps even to hiring more employees.

    Yes, that’s what I said zillion posts ago. But it won’t happen in Poland because whenever a poor might become just a bit richer he or she is forced to pay the highest tax.

    BTW In order to avoid paying taxes in Poland it’s enough to tell Urząd Skarbowy that you don’t reside in Poland. Why do you think Kulczyk Investments’s HQ is in Luxemburg?

  39. Sylwia says:

    Raped women are still tiny minority of society, being victims of a crime. The richer uses infrastructure constantly, without which they would never had possibility to make their money or increase their wealth.

    Nothing to do with infrastructure. You said that the rich should pay more because they need police protection more. And aren’t the robbed rich a tiny minority anyway?

    You are confusing me with someone else, i have never claimed that social security is part of income tax.

    This is one of your previous arguments in defence of the progressive income tax:

    Being reacher makes you more aware of your health and fitness. Such people tends to profit from that by visitiing their doctors more often. Private health care is not a solution if you want to se a paediatrician or oncologist. What is more, if you you have a car accident you will get a medical support from the state. The same goes to accidents in the ski resorts, at the sea and in the lakes in Poland.

    Perhaps you should read what you write.

    Every more difficult treatment is treated by polish National Health Care.

    That must be why Wałęsa chose to have a surgery in the USA!

  40. Boguslaw says:

    @sylwia
    “You lost me here. What facts?”

    Life in Poland is still cheaper. Some of those Poles were claiming that cheap polish food and lower costs of renting a flat means nothing and we should focus on costs of education in UK which according to them is cheaper in UK. Well, good education in Poland means still public education. No matter whether we are talking about high school or univeristy. In UK good high school is private and student fees (except Scotland) are quite high as well.

    @sylwia
    “About Latvia. Perhaps it hasn’t occurred to you but even after they raise their VAT it still will be lower than in Poland. I didn’t think it’s something worth the bother since it’s insignificant in comparison to us.”

    My god Sylwia, you know well, that Latvian raised standard VAT rate to 21% (22% in Poland) as well as they started to tax food at the rate of 10% (7% in Poland). Standard rate is roughly the same in Poland and Latvia, but food is taxed lower here, let alone that latvians raised plenty of other indirect taxes. It is significant.

    @sylwia
    “Moreover, I’d suggest there’s a global crisis right now, in the West as well as in the East. It’s rather silly to blame it on tax system.”

    Not so fast. It is clear that in some countries crisis is harder than in the others. Social states like Austria, Sweden, Denmark, France and Germany are doing just fine. Its not an accident that those more neoliberal states are facing more difficulities. Baltic states and Iceland are those with flat tax and strong neoliberal policy. Spain and Ireland are going backwards now. Poland is in quite good shape, and we should look carefull at them all, and choose the best policy for us. Instead of Latvia we should focus a little bit more on Nordic or Benelux states.

    @sylwia
    “You keep arguing that only a progressive tax will do us well. But we do have a progressive tax. Why then our economy stands so low?”

    Of course it is not so easy. Progresive tax in itself will not lead us to the welfare, as well as implementing a fla tax will not fix all of our problems. But the fact is that our economy is doing better than Estonian or Latvian, because as life passing by it is clear that they temporary succes was built on shifting sands.

    @Sylwia
    “Yes, that’s what I said zillion posts ago. But it won’t happen in Poland because whenever a poor might become just a bit richer he or she is forced to pay the highest tax.”

    Dont you think that if more people become members of the middle class, thresholds will be raise?

    @sylwia
    “BTW In order to avoid paying taxes in Poland it’s enough to tell Urząd Skarbowy that you don’t reside in Poland. Why do you think Kulczyk Investments’s HQ is in Luxemburg?”

    I dont think so. Listen Sylwia, Luxembourg is not tax haven. They top income rate is indeed 38%, but you should remember about wealth tax as well as The Fortune Tax, let alone high corporate tax. They taxed the rich a lot!

    http://www.lowtax.net/lowtax/html/jlxpetx.html

    @sylwia
    “Nothing to do with infrastructure. You said that the rich should pay more because they need police protection more. And aren’t the robbed rich a tiny minority anyway?”

    Well i was thinking more about process of preventing crime or burglars. You see, police spend more time on protecting middle class neighbourhoods. Safe neighbourhoods means better neighbourhoods. Value of property in such areas is raising and so on. Have a look, at Christmas you will find more often police protecting such neighbourhoods rather than those poorer ones.

    @sylwia
    “This is one of your previous arguments in defence of the progressive income tax:”

    I have confused you, sorry. I was trying to defence progressive taxation as a whole.

    @sylwia
    “That must be why Wałęsa chose to have a surgery in the USA!”

    Common Sylwia, you know well that Walesa is a special case. Most middle and higher class Poles will never get such an opportunity.

    ———–

    And speaking about polish tax system. I am sorry for making that mistake about tax allowance. I have a small company since semptember and its my first fiscal year.

    But you have confused me as well.

    @sylwia
    “I wrote circa 24.21% because I didn’t feel like double checking all of the elements, but here’s especially for you:

    9.76% (emerytalne) + 1.5% (rentowe) + 2.45% (chorobowe) + 9% (zdrowotne) = 22.71%”

    When you were writing about social security tax i was thinking that you are reffering to ZUS. Skladka zdrowotna is not technically part of skladka ZUS, as far as i know.

    Social security contribution on employee side is:
    9,76% (emerytalna) + 1,5% (rentowa) + 2,45% (chorobowa) = 13,71%

    Skladka zdrowotna is 9% which is one of the lowest rate in UE.

    http://euro.bankier.pl/news/article.html?article_id=1607924&type_id=1

    There is also quite interesting story with polish tax wedge. Here are tables (table O.2) made by OECD, showing decomposition the tax wedge in the income tax, the employee and the employer social security contributions.

    http://www.oecd.org/document/57/0,3343,en_2649_34533_40233913_1_1_1_1,00.html#table_02

    In 2007 Poland was third to last among OECD members states.

    I think the most important is decompositon of taxes in our system, which probably need to improve.

    Having said that, i want to finish that discusion. sory if i made you sad, i had few bad days and perhaps i exagerated too much.

  41. Boguslaw says:

    Sylwia: I have written a respond, but my comment is still awaiting moderation.

  42. scatts says:

    Boguś – I have just checked our back-stage area and there’s nothing in either spam or pending from you. If it is held up it is still in the WordPress machine, not our blog. I’ll check again later.

    Or were you referring to the one that has been posted above?

  43. Boguslaw says:

    scatts: Yeap, everything is ok now. I was reffering to this post from yesterday. Thanks.

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