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Slovenia’s Ministry of Pain Finance.
According to a recent article in Forbes magazine, Slovenia is the place to be if you love paying taxes and like to do it a lot. If you’re married, earn 200,000 euros/year, and your goal is to give up as much as of your money as possible to the government, Slovenia will oblige you the most.
This slide (featuring a curious choice of picture to represent Slovenia) lists the numbers that make Slovenia #1. The hypothetical married couple earning €200,000 would bring home €86,903 after taxes. This is five thousand euros more than the second most heavily taxed nation: Belgium.
Even worse, as this horrific chart makes clear: Slovenia is at the bottom every time. A single person earning €50,000 in Slovenia also gets hit harder than anyone else. Likewise millionaires.
There doesn’t seem to be much outrage about it. Probably because 95% of people are too busy evading taxes, defrauding the government, or cheerfully working off the books. The other 5% are idiot foreigners like myself, who are just too stupid to join them.
I think it’s also worth mentioning that this is a country whose legendary hero, Martin Krpan, is a tax evader.
You can read the Forbes round-up here.
(Via Capitalism and Freedom)
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Careful now, you might be labeled a “subversive foreign element”, planted by the imperialistic USA to spread the bloodthirsty creed of capitalism to the green paradise on the sunny side of the Alps.
It wouldn’t be so bad if the people actually got SOMETHING for all the taxes they paid.
Don’t forget the Boston Tea Party, some of America’s heroes were tax evaders too!
At least Slovenia’s only 16th in the Misery table and has gone down 11 places in the last year. Another 11 places next year, please!
Ahh Camille, but we do get something in return for paying the taxes… as crni pointed out elsewhere this morning, 100K EUR for eaxmple will be spent on the world ploughing championship… Yeah!
It really is a slightly disheartening situation. Those who can/know how to/actually have funds to do this with/ undoubtedly find innovative solutions to the problem.
Though changing permanent residence to another, even tinier country may lead to (alleged) drug abuse (discovery), it would seem…
crni: If (when?) you return, at least we’ll be on the same watch list.
I never made the Boston Tea Party connection before — thanks Camille. As I said, though, what I find endlessly strange is that there isn’t more outrage. Other countries always seem to have a rightwing party that constantly screeches about high taxes, but that doesn’t seem to apply here. I know the current (center-right) government set about reforming the tax system, but the changes were surprisingly modest.
Also: (and I hope some economists can help me with this one) if you’re losing more than half of your income to the government, aren’t you actually working more for the government than anything else? And isn’t that essentially still socialism?
It’s indeed weird that the voice of those who want even more benefits (at the expense of taxpayers) is louder that the voice of people that pay all those taxes. I guess we can’t scream that loud since the taxes hold us by the neck
Yes indeed. This is not only essentially socialism, this IS socialism. Slovenia has never switched to capitalism, and if you talked to enough people in this godforsaken country, you would get a pretty good idea why.
Actually, in Germany we also work something like the first part of the year (or a few days more) for the Government…
Actually the government administrative costs are not 50%. They basically funnel it back in the economy, and economically it makes sence up to a certain degree, coz tax multiplayer hurts the economy less then investment multiplayer bust economic growth. But thats based on notion state has at least some idea whats worth investing in. Ofc. that also couses crowding out efect, when private capital cant invest coz state alredy does.
Dont come whinning if its boring, you wanted economy explanation! Im just the massanger.
According to DURS (Slovene equivalent of IRS), a meagre 2% of taxes go unpaid in this country.
Suspiciously rich people will always find ways to evade taxes - but they didn’t become rich because they evaded taxes, but they can evade taxes because they’re rich and powerful and have some leverage with the government (any government).
Yes, I agree that public money is often spent in suspicious ways, but what would happen if government reduced taxes? Rich people would be even richer, while the state would shift the tax burden on the rest of us.
The concept of “less government” is a myth. Why else does every budget of every country (including the USA) increase every year?
And this is not socialism. It is, however, a social state (sort of)
@Burns: Bingo! I couldn’t have said it better myself
Why else does every budget of every country increase every year?
I’m not sure where you got that information but, I would say - because GDP also increases. It’s not about rich getting richer, its about how much are you willing to work before you say someting like: “#*@#***!”
Take a look at this graph
@Ležalnik: Willing to work… You make it sound as if we have a choice
Unfortunatelly, the truth is that people in Slovenia today work more for less pay precisely because the rich are getting richer.
I mean, someone has to keep the GPD growing, right? And trus’ me, it’s not the Slovene nouveau riches who keep it rising, but the middle and lower class, who also take the brunt of the tax burden. And they (we) often don’t get the luxury of deciding how much we want to work.
The harsh reality of life is that you work as much as you have to, otherwise it’s “Zavod za zaposlovanje” for you.
And from what I hear even the civil service is no longer a job from 9 to 5.
@pengovsky: Hear, hear!
if you compare on the misery index chart slo and usa, you will see, that USA is even higher, when it comes to personal and corporate taxes. actually exactly 50% of the countries, listed on the chart below, have higher corporate and personal taxes. the main difference comes from the the social and health security contributions. 38% compared to 15,2 in the USA for instance. how ’bout switching to their system? anyone?
a meagre 2% of taxes go unpaid in this country.
I believe that. But I believe that’s for reported income. The government has no idea how large the gray economy is — all those people working side jobs and what-not. My guess is that it’s more massive than Massive Attack.
I appreciate the explanation, Burns!
And, for the record, I certainly don’t support massive tax cuts for the rich. I do think some hardcore tax relief for families would be a great idea, especially considering that Slovenia is in the middle of a looming demographic crisis.
Also for the record: I love ležalnik’s graph.
On a personal level it seems so. But the tax curve is the way it is, unless we are again a “special economy” that works differently. Maybe we are the Taxiest Place on Earth because we actually masochistically like to pay taxes
how much are you willing to work before you say someting like: “#*@#***!”
Amen to this. I’ve actually reached this point. I recently did something for ORF and will get so little out of it that I have no interest in ever doing it again. The same goes for a lot of stuff I do on the side; it’s just hard to stay motivated when you know it’s mostly going to the folks at DURS.
@Michael M.: Oh, the grey economy!
Ah well, that’s an entirely different issue… Maybe you should start moonligting too 
In Ljubljana new bouncers without a record are in high demand now 
@Ležalnik: Love the graph, as well… But unfortunatelly your curve applies only in economic theory, provided that all players in the market have the same starting point and the same access to information (Stiglitz, I believe, has had something to say on that)… Most of us don’t get to the point of deciding that “enough is enough”.
There are, truth be said, two groups of people in Slovenia who decide when they will not work anymore: Students (most of them, anyway) and freelancers, who often limit their pay and/or workload according to taxes they’d have paid otherwise.
But both of these groups add little or nothing to GDP and state’s coffers, so they’re not really relevant in this case, no?
@Michael M.: DURS could not have taken more than 25% cut. Or has it?
@Michael M. at 12:09 pm: You sound like you have no benefit for paying your taxes. Children around here get chances for good education. Public roads get built and improved. Books and art projects are subsidized so they can be published. Even ploughing contests gets sponsored, for God’s sake! In Slovenia, if someone dies because the public doctor didn’t have time to accept him, health insurance or no health insurance, at least this is NEWS, it’s not just something that is widely accepted. I’m willing to pay even more taxes to live in this “green paradise on the sunny side of the Alps”.
You say that the government should consider tax relief for families. What for?! For buying new SUVs and building even more environment-unfriendly houses? Those who want to have children and are willing to sacrifice their spare time for more education to afford them some extras, can. Those who don’t, can choose this option too. Does it get any better?
There’s nothing wrong with being or becoming rich. It is wrong to become rich by breaking the law, but this must be solved on court, not by raising taxes. A young, smart and capable person, just out of college without a rich backup family should be able to become rich. Instead, he or she is able to move out of their parents house like when he or she turns 40 :). High tax burden on the salaries is not the only problem here but yes, it’s a start.
average, 50.000 eur per person ?? hello! hypothetical numbers used in calculation are to high. I think, taxes are to high for low and middle class. The ones over 200K should pay.
You sound like you have no benefit for paying your taxes.
You’re right; I certainly don’t mean to sound ungrateful. I do see that lots of work is being done and it’s certainly nice to be taken care of medically. However, why are Slovenes paying so much more than other countries that offer even better services? (Looking at Scandinavia here, or the rest of Europe.)
It’s also frustrating that I’m paying full blast for, say, kindergarten because I wasn’t smart enough to have my wife claim she’s a single mother. There seem to be countless ways of cheating the system like this, in which primarily honest people are punished.
peng: I wish. At the end of the day, I lose about 50%.
What a ridiculous article. The entire focus is on where a wealthy executive can most easily hold onto his or her bloated income while parasitizing the host society–taking advantage of public goods without contributing a fair share towards their upkeep. I’ve been living in Slovenia for more than twenty years and have always considered it a fabulous deal, especially compared to what you get in the USA–unaffordable health care and the privilege of contributing to the biggest, most wasteful, and most hated military in the world. In Slovenia, I and my family have benefited from comprehensive good quality health care, a year’s paid parental leave, outstanding subsidized care for preschool children (though I understand it’s a lot less affordable now than when my daughter was a toddler), plus a host of other things (cf. Rumpelstilzchen and more). I am happy to pay taxes in exchange for good government and public services that benefit the entire society. I do object to excessive amounts of taxpayer money lavished on worthless, corrupt politicians who do not work for the public interest but rather toward enriching themselves and their sponsors, nor am I thrilled about Slovenian public monies being used to, say, train and send Slovenian troops to serve in American wars of aggression. But overall, my family gets more than its money’s worth from living in this country and participating in its economy. So wealthy greedy executives, be my guest (or rather, don’t be)–bypass Slovenia and go live high on the hog in Forbesian paradises like UAE, Ukraine, and Romania.
Yes. We are one of the most taxiest country on the world, but we also have a lots of social benefits the people in other “west” countries can only dream of ;)… However, the trend are lower takses, but also our social rights including the quality of our high-school system (which is still a lot different than system in USA, but evidently more successfull and good for students)and health-care system and other such social benefits. If we want low taxes, we have to say goodbye to such benefits.
Let’s not forget about VAT… which is a tax payed with the money we got left after tax. :).
As MM said… not that taxes are not used for brib… and specul… er… improvements. (That I don’t know which they are, yet), but here you pay an absurd amount of your salary and get much less for it, there’s an awful lot of things that you have to pay apart, after having given 40% of your not so buoyant salary to the glorious republic.
And there’s the other factor. The stealing culture… seems the more black money you get, the more you fool your customers and the government, the smarter you are. F*** that retarded way of thinking, really. -Though it seems the only way to go, if you don’t want to need lube.-
Agreed with “ak”.
Sure, we could get gross paychecks, but then we’d have crappy health insurance, like in the US, couse half the people would not choose to pay it, sure they’d save a few bucks, but when your kid gets a flu?? Its good to have all thesea benefits.
Btw, average pay here is like 8-10€ euros (netto), which is, maybe 15-20k, less than half the article gives for examples.
We just need to raise paychecks somehow, the rest is good.
Thats 8-10 thousand euros
/me grabs popcorn and waits for Patrick/
>we also have a lots of social benefits >the people in other “west” countries can >only dream of
Can someone tell me such benefits? In Spain and The Netherlands, the only thing that is worse is parental leave, as far as I can see.
Paying 10% more in income tax because of that means that my wife and me should have about 7 children to recover that (assuming 35 working years).
If you manage to write 30 comments till 3:00pm you can hardly complain about the amount of work…
The meek shall inherit the earth people so lets go and earn our 40% and start whipping our selves while we are at it, just in case. 
www.youtube.com/watch?v=MS6cIgI9c4k
I prefer Krpans version…
Well, at least now I know why we have so high taxes…
@Michael M.: According to this Slovenia’s income tax is between 16 and 50 percent. In this respect the Forbes’ article is misleading, because earning 50.000 euros will put you right at the top of the earning chart (that’s 12 million tolars per annum). 2/3 of people earn less than 10.000 EUR yearly… I know that every cent counts and I totally understand that you’re pissed about other people efficiently bending the rules and getting away with it. But let me tell you that you don’t want to have the DURS breathing down your neck. These guys are not so incompetent as they seem….
Better services for less money? You think? I mean, not all is shiny and glowing in Slovenia to be sure (people dying in hospital waiting rooms and all) but lowering taxes will not get you that.
@Ležalnik: No rich person was made poor by taxation. Ever.
Peng: So what. All the countries across the world are compared. BTW, did you report all your DJing fees to DURS? If not, you are being very hypocritical, advocating high taxes while being a tax dodger. But it’s OK, that’s the typical Slovenian “let my neigbors’ cow croak” mentality.
@crni: Point is that Forbes’ article is basically useless as far ar Slovenia is concerned… It’s “pop-journalism”. Take an arbitrarily set number and then twist and bend it all over the world. 50 k€ in Slovenia will buy you a whole lot more than in Norway.
So here you are calling me a tax dodger and saying that I have the typical Slovene “let thy neighbours cow croak” mentality, but you’re missing the basic point - high taxes do not mean less pay. Because you’d have spent the money on different services (health, primary schooling, etc…)
Again - there are holes in the system, to be sure. But these are closing up rapidly.
BTW: do you know what would happen if the government slashed, say 25% off income tax? The salaries would drop accordingly. Because (if I understand things correclty) all income is based on “basic salary” (osnovna plača) and then multiplied by certain factors, including taxes. So if taxes are cut, we’d just earn less in terms of gross pay.
So, as primski said, what is required here is raising the paychecks somehow.
Please Peng, explain me the point of multiplying slovenian euros by a PPP-factor of roughly 1.3 and telling me this is because 50 k€ in Slovenia will buy you a whole lot more than in … Germany. I don’t buy this. Retailing prices are higher in Slovenia (just compare 1 l beer at Hofer and Aldi!), rents are comparable, if not even higher too, and so on and so on…
I said Norway, because Michael M. pointed out Scandinavian countries. But where did you get the 1.3 PPP between Slovenia and Germany? according to this, Germany is 5th in the world and Slovenia somewhere around 80th place.
I can buy that prices in Germany are about the same as in Slovenia, but the average pay is much, much higher - with tax burden about the same than in Slovenia.
@peng: “high taxes do not mean less pay. Because you’d have spent the money on different services (health, primary schooling, etc…)”
Sorry to differ… but I’ve always got full health insurance w/o paying a buck since I was born, free kindergarten, primary, secondary and high school education. My whole univ degree costed 105 € (coffee and casual photocopies aside) 85€ of which were payment for the pretty title; had public transport available at a ridicule price -regardless of any kind of “status”- and I haven’t had to pay cestnina in my life -unless u really want to use private speedways-. And that having in mind we must have 100 times the number of Slovene politicians, and therefore 100-fold more money going where it shouldn’t.
At the end of year in Spain I’d get money back (with no one depending on me, living with parents etc). Here they only accept 100€ per month for taking care of Maja (and that after a pair of my usual bureau-fights), don’t talk about considering the not-quite-low rent as relief. Hell, you even are supposed to pay taxes from the money you get from Zavod za Zaposlovanje, if that income makes you reach the tax level. In the end I’ve got to pay more.
Yep, I agree raising salaries would be cool, specially that basic one. But using taxes better wouldn’t be bad either. And for sure raising paychecks here will equal nothing but raising prices so it’s also a problem of mentality.
Pengovsky, your salary is gross salary. This is what the employer must pay you. After you pay you dues to the state (social&health insurance, income tax (”akontacija dohodnine”)) you get your net salary. Changing income tax will have no effect on your gross salary only your net salary will change. Employer must also pay salary tax, that is calculated on the base of your gross salary. This tax was introduced in 96 and will be gone next year I think….
Peng: The 50K number is arbitrary, but it still tells a good story. I don’t think any PPP or whatever will tell you a better one. Also, when you look at the huge differences in these numbers, you cannot stretch your “hidden costs” that much.
As far as your increasing the salary is concerned, I either don’t understand your point or you don’t really understand progressive taxation.
In either case, I know this debate is futile. I’ve made my choice…
@Pengovsky: According to Wikipedia
GDP (nominal) per capita in Slovenia:
18,610(2005) 16.986(2005)
GDP (PPP) per capita in Slovenia:
24,571(2006) 23,400(2006) 21.808(2005)
In case anyone is interested:
Aldi Germany, Karlskrone 6x 0,5l: 1,79 Euro
Hofer Slovenia, Ottakringer 1,0l: 1,18
Well, there is a good side of not having that much money to spend on bread…erm, cakes.