Economics and tax matters

BSRB places importance on ensuring that social stability is the guiding principle in economic administration. Economic inequality is growing in Iceland, particularly when it comes to assets. Concentration of wealth and power is harmful to the society; it causes social class division and reduces social unity. This must be countered, i.a. with changes to the taxation system.

BSRB places emphasis on the importance that the taxation system be used as equalisation tool. The taxation system as well as the welfare system should be run with the mindset that people pay a deposit according to means but withdraw according to needs. Those who are more financially capable should deposit proportionally more than those who are less capable. Agreement must be reached on this way of thinking in government operations; it is important to have solidarity and equality of people at the forefront.

The municipalities provide their residents with important services, and their projects are gradually increasing. The income bases of the municipalities do not reflect this development. This has meant that the wages of workers employed by the municipalities are generally the lowest in the Icelandic labour market. BSRB is therefore of the opinion that it is important that participation of the municipalities in the government’s tax income be reviewed and increased.

It is important to increase the balancing role of the tax system and reduce the tax burden of low and average income groups and balance the loss of income with taxation on those who are in the highest income group and big property owners. BSRB wants to raise capital income tax so that operating profit income tax and capital income tax will be comparable to income tax on wage income and that the tax rates are higher for those who have the highest capital income. Rules on taxation of presumptive incomes must also be tightened so that certain minimum total income will be taxed as general income.

BSRB demands that increased asset inequality will be responded to with a large property tax on net assets of those who are the richest and that revenue and asset formation of holding companies that are not engaged in commercial operations be taxed for owners.

Iceland is rich in natural resources. BSRB demands that the nation is given a rightful share of the dividends generated from private parties’ use of resources with a tax on economic rent. BSRB also attaches great importance on public ownership of natural resources, instead of being owned by private entities.

BSRB places emphasis on public ownership of society’s basic infrastructure and wholly discourages the selling of energy companies owned by the government and other profitable companies.

BSRB demands that the current tax legislation will be completely reviewed with the goal of correcting provisions which lead to tax avoidance, inequality and weakening of the government’s income bases. Tax enforcement must also be substantially strengthened; budget allocations to that policy area translate many times over into public funds with increased taxation.

Technological changes and automation call for new ways of thinking about revenue generation. When technology replaces the human hand, it is important that the profit that is generated partly flows to the government.

The charging of carbon surcharge on fossil fuels is an important part of reducing greenhouse gas emissions. BSRB demands, before decisions are made on taxation and tax concessions in order to reduce emissions, analysis on the effects of taxation on different income groups will be made. If the burdens prove to be a heavy load on the lower income groups, it is important to react with investments in more climate-friendly services which can replace the services currently being taxed or with direct payments to lower income groups that suffer the most from the taxation.

BSRB places great importance on tax reductions being fully financed and that they do not result in cuts in public operations, investments and income transfers. Collective consumption is important to ensure equality of people, irrespective of income, and its weakening results in increased inequality in income, health and education.

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