Today’s Brussels Metro (bilingual FR/NL – registration required), reports that Belgium’s social security budget deficit may pass the €2 billion mark in 2004, although the relevant Belgian minister claims that these figures are not definitive. The socialist union FGTB/ABVV wants to shift social insurance payments from being a payroll tax to an income tax, because non-salaried workers – independents and the like – pay into a separate fund.
What I find surprising in this short, front page article is towards the end, when Pieter Timmermans, head of the Belgian Chamber of Commerce, claims that:
Il ne faut pas plaider pour des recettes suppl?mentaires, le taux dimposition en Belgique est d?j? trop ?lev?. Il faut plut?t diminuer les imp?ts pour red?marrer l?conomie et garder la r?duction des charges de €800 millions pr?vue par le gouvernement. Ce genre de mesure permettra de cr?er de lemploi et d?gagera des recettes suppl?mentaires pour la s?curit? sociale
We shouldn’t be asking for more taxes, they’re already too high in Belgium. We should lower taxes to get the economy moving and keep the €800 million tax cut that the government has already passed. This kind of measure will create jobs and lead to higher social security revenues.
That certainly sounds to me like supply-side economics. It hasn’t worked terribly well elsewhere, as others have pointed out. Europe has largely been free of this sort of thinking and I certainly hope that it doesn’t spread beyond the employer’s associations. Either cut taxes and accept lower spending, raise them and accept the consequences, or run deficits with the knowledge that you have to pay them back. This doctrine of painless tax cuts is not going to help anyone.