SPÖ proposes earlier activation and permanence of the 55% top income tax rate
The SPÖ-led social ministry plans to apply the 55% top tax rate to a lower income bracket and make it permanent, financing an increase to the child extra allowance.
In the upcoming social assistance reform, the SPÖ-controlled social ministry is set to lower the income level at which the 55% top marginal tax rate applies and eliminate its temporary status, making it indefinite. This adjustment aims to provide revenue for raising the child extra allowance, which benefits families whose primary tax credit does not fully apply due to low earnings. The finance ministry, also led by the SPÖ, supplied the proposal, which would be codified in the income tax law instead of the core social assistance legislation.
The draft notes that the new income threshold will not be subject to inflation indexing. The reforms are slated to take effect from 2027.
Why it matters
The tax change could affect high earners and fund additional support for low-income families.
In this story
