SHARE
COPY LINK
For members

MONEY

EXPLAINED: What is Austria’s ‘Tax Freedom Day’?

People in Austria are working longer to finance government spending, leading to calls for a tax reform. Here's what you need to know.

EXPLAINED: What is Austria's 'Tax Freedom Day'?
Tax Freedom Day in Austria has arrived later this year. Photo by Markus Spiske / Unsplash.

Anyone that lives and works in Austria will be aware that this is a high tax country. But what does Tax Freedom Day actually mean?

Here’s a quick explainer.

READ MORE: Over half of Austrians on financially shaky ground: survey

Tax Freedom Day is not a tax-free day

Tax Freedom Day (otherwise known at Taxpayer Memorial Day) is the date when the Austrian population starts working to fund their own pockets, rather than the government’s.

In 2022, it falls on Monday August 15th – one day later than in 2021.

Martin Gundinger, a Research Fellow at the Austrian Economics Center, said: “This means that the Austrian population works seven and a half months exclusively to finance government spending.”

Among OECD countries, Austria has one of the highest wage and non-wage labour costs at 47.8 percent. Only Belgium (52.6 percent) and Germany (48.1 percent) have higher costs than Austria, reports Kurier.

Non-wage labour costs refer to an employer’s expenditure on personnel, such as social security and insurance contributions.

READ ALSO: Where are energy prices going up (again) in Austria?

Calls to reduce the tax burden in Austria

As the Austrian economy feels the heat from the increased cost of living and rising interest rates, there are calls for the federal government to reduce labour costs in Austria.

Christiane Holzinger, Federal Chair of the Young Economy in the Austrian Economic Chamber, said: “Reducing the cost of labour is an essential factor for the workplace and business location – and right now it is the best recipe for an economic upswing.”

READ ALSO: When will you get your cost of living ‘bonus’ payments in Austria?

Likewise, Barbara Kolm, Director of the Austrian Economics Center, is worried that Tax Freedom Day could arrive later each year, which will further increase the economic burden on businesses and employees.

Kolm said: “Rising interest rates lead to higher burden to repay the debt. If there is no willingness for comprehensive reforms, Tax Freedom Day will be pushed back further.”

READ MORE: Vienna forced to dim street lighting and cancel some Christmas illuminations

Gundinger, from the Austrian Economics Center, is also calling for a tax reform in Austria.

He said: “Against the background of the rising inflation rate, a reduction in taxes – along with cuts in government spending – makes sense.”

“Decreasing taxes ensure higher productivity, and if more is produced, this has a price-dampening effect. In this respect, an urgent rethinking of politics is necessary, which is currently trying to counteract this with additional expenditure and special levies.”

Additionally, the New Austria and Liberal Forum (NEOS) is calling for the expansion of state-funded childcare for all children from the age of one to allow more women to enter the workforce on a full time basis.

The NEOS also want to end cold progression (when the tax burden increases but income does not due to inflation) and reduce non-wage labour costs by 6.55 percent.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

GERMAN LANGUAGE

7 ways to talk about money in German

With many of us having to tighten our belts at the moment, here are some uniquely ways to talk about the hot topic of money in German.

7 ways to talk about money in German

1. Geld wie Heu haben

If you’re lucky enough to be extremely wealthy, you may be able to say “Ich habe Geld wie Heu”, though it won’t make you very popular.

The English translation of this widely used phrase is “to have money like hay” –  in other words, to have so much money that it’s barely countable.

As most people don’t have huge hay reserves these days, the phrase likely dates back to the Middle Ages, when the gap between rich and poor, namely between the rural population and the nobility, was particularly stark.

Example:

Seine Eltern haben Geld wie Heu!

His parents have got money to burn!

2. Wer den Pfennig nicht ehrt, ist den Talers nicht wert

This thrifty phrase translates as “he who does not honour the penny is not worth the taler” – taler being an old silver coin. It’s similar in meaning to the phrase “look after the pennies and the pounds will look after themselves” in that it reminds us to appreciate even the small things, and that many small coins add up to a large sum.

(Photo by Philippe HUGUEN / AFP)

The origin of this phrase goes all the way back to the time of Martin Luther in the 15th century, who is said to have written the older version of the phrase Wer den Pfennig nicht achtet, der wird keines Guldens Herr (“He who does not respect the penny will not be the master of a Gulden”) above his kitchen stove in chalk.

3. Geld zum Fenster hinaus werfen

This expression is about wastefulness, and means “throwing money out of the window”.

The phrase is said to have originated in the Middle Ages in Regensburg, where the ruler would stand at the town hall window and throw money to his subjects.

But, since it was their tax money he was throwing, the citizens coined the phrase: “Throwing our money out the window” to describe wastefulness.

Examples:

Du hast schon immer das Geld zum Fenster hinausgeworfen.

You have always thrown the money out the window.

Statt das Geld zum Fenster hinauszuwerfen, sollte er besser mal sparen.

Instead of throwing money down the drain, he’d be better off saving it.

READ ALSO: EXPLAINED: How to get free vouchers to learn German in Vienna

4. Geld auf die hohe Kante legen

This phrase goes back to a time when banks were seen as untrustworthy and people preferred to save their money in a hidden place in their homes.

(Photo by Andre Taissin on Unsplash)

The phrase meaning, “to place money on the high ledge” is still widely used today, as a way of saying “put a bit of money aside” and to save.

Example:

Die Deutschen legen immer einen Teil ihrer Einkommen auf die hohe Kante.

Austrians always put some of their income on the side.

5. Zeit ist Geld

Ok, so this one doesn’t originate from Austria or Germany, but it’s certainly widely-used in the German language.

The expression comes from Benjamin Franklin, the American scientist and politician who wrote it in his “Advice to Young Merchants” in 1748.

READ ALSO: TEST: Is your German good enough for Austrian citizenship?

It since found its way into the German language, which is hardly surprising. And the Germanic famous punctuality fits well with the idea that wasted time is costly.

Example:

In dieser Situation gilt: Zeit ist Geld.

In a situation like this, time is money.

6. das Geld aus der Tasche ziehen

This unpleasant phrase means “to pull something out of someone’s pocket” and is mostly used to refer to scamming, rather than theft.

It usually means to induce someone, in a cunning or fraudulent way, to spend money, or to take financial advantage of someone.

Examples:

Wolltest du mir das Geld aus der Tasche ziehen?

Were you trying to con me out of my money?

Trickbetrüger zeigen sich immer kreativer, wenn es darum geht, ihren Opfern Geld aus der Tasche zu ziehen.

Con artists are becoming increasingly creative when it comes to taking money out of their victims’ pockets.

7. Blank sein

Blank sein – meaning to “be broke”, is a situation most of us have probably found ourselves at one point or another.

The term blank originally meant “bright” or “shiny”, but later, the word came to mean “free of” or “stripped of”, eventually leading to this expression, meaning to be “free of money”.

Example:

Ich würde dir eins abkaufen, aber ich bin blank.

I would buy one from you, but I’m broke.

READ ALSO: 8 TV shows you should watch to learn about Austrian culture

SHOW COMMENTS