The Portuguese government has caused outrage by proposals to raid the incomes of workers through a massive hike in social security contributions. This was massively unfair given the heavy burden already placed in a string of previous austerity budgets on middle and low incomes in the country and especially because it came as social security contributions for employers were to be slashed.
On Saturday, after massive protests, that plan had been shelved.
So it is handy that, just hours ahead of the u-turn, the CGTP trade union confederation produced a Plan B, an alternative budget that would start from the basis that the broadest shoulders take the hit to help improve the public finances.
The union’s proposals would raise €6 billion thus:
- A new 0.25% tax on financial transactions – €2 billion
- 10% surcharge on dividends (paid to the largest shareholders) – €1.7 billion
- Higher rate (33.33%) of corporate tax for larger companies (turnover above €1.2 million) to be implemented in a progressive fashion – €1.1 billion
- Combat fraud and evasion, through deploying more inspectors, setting targets to reduce the black economy and by broadening the tax base – €1.2 billon