The introduction of four income tax brackets, 0%, 15%, 25% and40%, is the main measure of fiscal reform being considered by PSDin the draft ruling programme, which is set to be approved as apolitical alternative at the October 16th Convention.
If they came to power, the social democrats would combine thedifferentiated income taxation with a scheme of deductibilitiesmainly meant to encourage contributions to private health insuranceand pensions systems.
The natural rejection of a system of differentiated taxation amonghigh-income earners is set to be toned down by a reduction in thecorporate income tax to a yet to be decided level.
PSD's draft programme clashes with the option of the PNL (NationalLiberal Party), the second major opposition party, which wouldretain the flat tax system, or even cut it from 16% to 10% for anunspecified period of time.
The liberal ruling programme, approved by the PNL leadership thisweek, displays a completely opposing view to PSD's - which isimportant, considering that a collaboration between the two partiesin a future government has been repeatedly mentioned as apossibility.
In fact, what the PNL denounces and wants to correct through itsadopted programme is precisely the "welfare state" that theliberals claim PDL is promoting, and PSD wants to strengthen. Infact, the number of people collecting welfare has doubled over thelast six years, four of which were under PNL rule.
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