Stefán Ólafsson and Indriði H. Þorláksson presented this morning their new report, A fair tax load – how the great tax transfer can be reversed without weakening the welfare system.
In the report, a tax reform is proposed that aims at a fairer and more efficient tax system in Iceland. The proposals seek to reverse the shift of taxation onto poorer people and reduce taxation of people on low wages and pensions by at least 20,000 ISK per month.
Given these proposals, 90% of taxpayers would be taxed at lower rates. The next 5% would see little change, and the highest-earning 5% would pay more. Many ways are demonstrated to fund these changes, both by using the current flexibility in state finances, and through urgent changes in taxation and stronger monitoring of tax evasion and tax fraud.