The government’s recent tax cuts: Criticism from SF and the Labor Movement
The government’s recent proposal for tax cuts for entrepreneurs has sparked a wave of criticism from both SF (Socialist People’s Party) and the labor movement. According to SF and several trade unions, the cuts will primarily benefit the wealthy rather than support entrepreneurs. SF’s spokesperson for entrepreneurs, Sigurd Agersnap, expresses concern that the tax cuts, which mainly involve a reduction in the tax on stock income, will not benefit the entrepreneurial world. “Once again, the government is proposing very skewed tax cuts for the richest. It is completely skewed and does not help the entrepreneurs, but rather the people who own a lot of stocks today,” says Agersnap.
The criticism comes closely following the EU election, where the Social Democrats experienced a setback, while SF became the largest party. The government has recently presented an entrepreneur strategy that includes tax cuts for businesses and entrepreneurs totaling over 750 million kroner. A significant part of these tax cuts will lower the tax on stock income, with the taxation on stock income up to 80,000 kroner being 27 percent—raising the current threshold from 61,000 kroner. Morten Skov Christiansen, the president of the Danish Confederation of Trade Unions, is also skeptical about the effect of the proposed tax cuts. “Unfortunately, the proposal also includes significant tax cuts that I doubt will strengthen entrepreneurship, and especially the tax cut on dividends is completely skewed,” he says.
SF’s spokesperson on business affairs, Lisbeth Bech-Nielsen, furthermore points out that Tax Minister Jeppe Bruus of the Social Democrats has previously acknowledged that a reduction in the tax on stock income will likely not be of great benefit to entrepreneurs. In a written reply to the Danish Parliament in March, Bruus stated that the impact is assessed to be “limited” for this group. Although the Social Democrats have not previously been advocates for a reduction in the tax on stock income, both Venstre (The Liberal Party) and Moderate Party have supported the proposal.
Minister of Business Morten Bødskov emphasizes that the tax cuts are an important part of the government’s strategy to maintain new jobs in Denmark. “Our goal is to maintain new jobs throughout Denmark, and this is an important argument for that. Therefore, one must be careful not to see this as a tactical move,” said Bødskov at a press conference on Wednesday. Tax Minister Jeppe Bruus also urged that the tax cuts should not become the subject of an ideological battle.
The government’s entrepreneur strategy and the associated tax cuts will continue to be debated, with both SF and the labor movement seeking alternatives that can better support the broader entrepreneurial sector.