The proposed lowering of taxes in the new budget will see greater returns for the highest income bracket.
As reported, the Progressive-Independence Party coalition has submitted their budget proposal for the 2014 fiscal year. Amongst the many proposals is to lower taxes for those in the so-called “middle bracket”, i.e., those making 250,000 ISK to 800,000 ISK per month.
RÚV reports, however, that not everyone in this bracket will be treated equally – the more you earn, the greater your tax cut will be.
As can be seen in the above graph, those just inside the middle bracket will receive no tax cut at all. The more one makes, the greater their cut will be.
Also contained within the budget proposal is the goal to do away with the three-tier tax system altogether, and combine all incomes into a single tax bracket, Vísir reports. The government intends to make this a reality within the next four years.
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