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Danish government to reform tax system

Social Democrat leader Thorning wants to reduce income taxes, slow the indexed increase in student grants and reduce welfare transfers. Far left party threatens to torpedo proposal

The Danish government presented tax reform proposals yesterday Tuesday that, according to Prime Minister Helle Thorning Schmidt, will have a significant effect on all taxpayers’ finances, but benefit wage-earners the most, writes

At a press conference, the PM repeated the government’s new mantra that it should always pay to work instead of claiming benefits. Tax reform would solve many major challenges in one go by significantly reducing income tax, stimulating investment and encouraging people to make an effort.

Minister for the Economy Margrethe Vestager claimed that reform would create 14,600 jobs before 2020 as income tax is gradually reduced by a collective DKK 14bn. All three leaders expressed hope for a broad, cross-party agreement on the proposals when negotiations get underway.

Far-left party: Breach of promise

The far left Red/Green Alliance, the government’s guarantor of a parliamentary majority, has threatened to torpedo next year’s budget, if the governing coalition passes its tax reform bill with the help of the right-of-centre opposition.

Johanne Schmidt-Nielsen, titular head of the party, said after initial negotiations with Finance Minister Bjarne Corydon yesterday Tuesday that there’s still major disagreement about the government’s intention to »steal DKK 3bn from the unemployed and disability pensioners«.

But talks would continue »because somebody needs to remind the government what it fought for, and promised, during the election campaign«.

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