from Gergely Orosz | by Gergely Orosz

Because this goes viral too frequently, the facts (as a Hungarian): 1. Income from employment in Hungary is taxed at 33.5%: 15% income tax, AND 18.5% “social contribution tax” 2. Women w 4 kids are exempt for life of the 15% part only 3. Ppl over 65 exempt from the 18.5% part t.co/wNc0MVeAZp

While both polices sound like they are superb (lower taxes for women with 4 kids? And older people?) the sad reality is that neither many women with with 4+ kids, nor many over 65 work as employees. So it’s a tax break that doesn’t cost the government much.

Hungary is also a country that puts pretty heavy employer taxes for employing someone (invisible to the employee, but part of total cost for employment:) another 13% (so total tax rate 46.5% between employer and employee) This 13% also removed when employing those over 65 t.co/p08zcEq5KS

Finally, Hungary has the highest tax rate for goods in the EU-possibly, the world? VAT / tax on goods is 27%. So anything sold in the shops, as goods, cars etc has an added 27% amount that goes to the government. So while employment might be taxed less, consumption taxed v high

Some basic food and goods is taxed lower (meat, bread, milk.) The latter two not by much tho. Low income tax needs to be made up for by the government in any country with very heave government spend & expenses! t.co/22212t0rBA

“How efficient is this income tax exemption for fertility rates?” Since the 2020 exemption, no real visible change. It still sits at around 1.5. This means Hungary - as most developed countries - is seeing a slow and steady population decline (in the case of Hungary, since 1980) t.co/mhRndRLv6A

Also, since the introduction of this change (no 15% income tax for moms of 4 or more) there’s regular speculation in the Hungarian press if it would be extended to moms with 3+ kids. Unlikely but/c that change would mean too large tax revenue reduction. t.co/1UXr0yc96H

“How much money does this tax break mean for moms with 4+ kids, on average?” Based on official numbers for the government, it’s about $100/month extra for these families (HUF 40,000.) 0.1% of the population is eligible. $10M/year less income tax collected with this change. t.co/yJyTNARRTX