2024-10-22 09:35:00
While the French government tries to compensate for the public deficit by increasing taxes, its Portuguese counterpart announces a ten-year tax reduction to retain young talent. The idea is to benefit the future generation, but can we do it without increasing inequality?
Portugal is banking on a fiscal intervention to retain its young graduates: a first year without fees, followed by progressive reductions over a decade, the government’s last card to curb the brain drain. But this measure, which should compensate for the lack of opportunities commensurate with local ambitions, could hide a deeper divide in society.
On paper the idea is attractive: young people under 35, who earn less than 28,000 euros a year, will be exempt from income tax for one year, then subject to very reduced rates for the following nine years. But can we really believe that this tax incentive will be enough to stem the massive emigration, which affects more than 40,000 young people every year? “We have had enough problems in the past,” warns Mario Centeno, governor of the Bank of Portugal, who fears that tax cuts combined with an expansionary budget could destabilize the economy. Second The Echoesthis initiative aims both to slow down departures and to attract young people who often feel forgotten by policies that are too focused on the elderly.
The danger of this strategy is twofold. On the one hand, it doesn’t address the roots of the problem: a stagnant job market and low wages. On the other hand, it exacerbates tensions between generations. The socialists also managed to limit the effects of this measure to the middle classes, preventing the right from granting a more generous tax increase to high incomes.
If this tax reduction can be seen as a breath of fresh air for young people, it leaves the fundamental question unanswered: can a tax gift compensate for the absence of a more inclusive and equitable social project? In the long term, access to housing, decent work and a better quality of life will decide the future of young Portuguese people.
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