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Economy

New Democracy Bill Brings Middle-Class Tax Breaks – After Businesses

ATHENS – After offering tax incentives to businesses amid plans to try to lure foreign investors too, Greece's ruling New Democracy is drafting legislation to cut tax rates for the middle class sector battered by a near decade-long economic and austerity crisis.

A committee chaired by Nobel Prize-winning economist Christopher Pissarides made the recommendation, said Kathimerini, to lower the 28 percent tax bracket for those making up to 20,000 euros ($23,560) and reduce the 44 percent bracket for incomes of more than 40,000 euros ($47,120.)

The committee also recommends the scrapping of the hated solidarity levy in which taxpayers are assessed to pay for the less well off, totaling some 1.2 billion euros ($1.41 billion,) assessed on the total amount of income earned by individuals on an annual basis at progressive rates ranging from 2.2-10 percent.

Those changes are aimed at stimulating an economy brought down hard by COVID-19 just as it was beginning to more quickly accelerate before a long lockdown closed non-essential businesses up to 10 weeks.

Ironically, the changes to benefit the middle class are being brought by New Democracy to reverse the hits made by the former ruling Radical Left SYRIZA which championed itself as the savors of the middle-class before burying it with an avalanche of taxes.

That was done to get a third bailout for Greece in 2015, for 86 billion euros ($101.31) with then-premier Alexis Tsipras breaking his promise not to seek the rescue package as well as pledges not to impose more austerity, which he did.

The recommendation comes a year after New Democracy took power and after first moving to help businesses and then the low-income and self-employed, left the middle class twisting in the wind.

The Pissarides Committee’s proposal is that taxes be reduced in line with the Paris-based Organization for Economic Cooperation and Development (OECD) recommendations, which for years called for the slashing of high tax rates.

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