>Slovak press sees Czechs as laggards despite latest reform package


Slovak liberal daily Sme assesses the Czech reform package of flatter and lower taxation which has, as expected, just squeaked through the Czech parliament – although the headline rate of income tax seems lower in the CR (15% falling to 12.5% in 2009; 19% in Slovakia), it points out effective tax rates are higher as both employees’ and employers’ health and social security payments are included in the Czech tax base. Slovak corporation tax at 19% is still lower, although Czech rates are set to fall to that level over the next three years, and there are no taxes on share dividends. Twisting the knife, Sme notes that the real problem is that there is no strong reform coalition in the CR as there was in Slovakia in 1998-2006. However, if the price of such a coalition is the left blasting back into power a few years later a la Robert Fico, Czech free marketeers might do well do consider whether they in fact may have some hidden advantages, although, that said, the current consensus seems to be that Fico, despite posing as a kind of Central European Hugo Chavez, cannot and will not touch the main pillars of earlier neo-liberal reforms and Czech politics seems polarized even before any really radical reforms have been passed.

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