The Bureaucrats at the OECD don’t pay any taxes on their own salaries, but they work very hard to make sure everyone else is hit with exorbitant rates. They’ve persistently fought against tax competition to make it easier for politicians to raise taxes without driving away taxpayers and investment. And in the OECD’s fantasy world, higher taxes and more government spending increases economic growth.
So it should come as no surprise that the OECD, in its recently released “economic survey” for Hungary, encouraged the nation to raise taxes on property, energy, inheritance and wealth. Hungary impressively told them that it ain’t gonna happen:
Hungary’s Minister of Economic Strategy has dismissed OECD proposals relating to a number of taxes, saying that tax reform in the country had been completed and that only some “fine-tuning” may be necessary.
Zoltán Cséfalvay, who is also the Hungarian President of OECD’s National Council, made the comments at a press conference on the new OECD Economic Survey of Hungary. He said that a proposed new property tax would adversely affect low-income owners, and was therefore not currently under consideration. Further, energy and environmental taxes were “not realistic,” as existing taxes were already higher than the relevant OECD average.
Elsewhere in the report, the OECD acknowledged that a recent bank levy had a negative impact on lending. But they never similarly grasp the negative impact on savings and investment that comes from taxing capital.
None of this is to say that Hungary is a model nation when it comes to fiscal policy. On the plus side, they did join the flat tax club in 2010. Unfortunately, they also have a VAT on top of the flat 16 percent individual income tax, and their overall tax burden is 36% of GDP. Even worse, government spending is almost 50%! Like much of the rest of the continent, their government is simply too big.
Still, if the OECD had their way Hungary would be taxing and spending even more. For that matter, so to would the U.S., which makes it even more baffling why American taxpayers continue to subsidize the largest share of their budget.
