Social Liberals force Social Dems and SF to drop plan for new top tax on high-income earners, but give way on immigration reforms
Margrethe Vestager (centre) has reportedly agreed not to push PM-designate Thorning-Schmidt (right) and SF leader Villy Søvndal (left) on immgration reform in return for concessions on economic policy (File photo: Scanpix)
In negotiations over the new left-of-centre government, the leading Social Democrats (S) and their partners, the Socialist People’s Party (SF), gave in to the Social Liberals’ (R) demand to scrap the so-called ‘millionaire tax’, Jyllands-Posten reports.
In exchange, the Social Libs agreed to let the Social Dems and the SF keep the ‘24-year-rule’, a controversial immigration stipulation that both partners of international couples applying for family reunification in Denmark must be at least 24-years-old.
The three parties have been engaged in policy negotiations to form the basis for a new S-SF-R government after securing the majority in the parliamentary election on September 15th.
Social Dem prime minister-designate Helle Thorning-Schmidt and SF leader Villy Søvndal campaigned on the promise of levying an additional income tax on the highest income earners – those who make more than one million kroner a year.
That tax would have affected some 20,000 Danes and would have put an addition 1.2 billion kroner per year in the state’s tax coffers. The parties promised to use the extra tax income to increase welfare benefits and the personal employment deduction.
By contrast, the Social Libs campaigned on a platform of economic reforms, lower taxes, and softening immigration rules, including the total elimination of the 24-year-rule, introduced by the outgoing government. While the Social Dems and the SF support softening some of the immigration rules, they both campaigned on the promise of safeguarding the 24-year-rule for at least their first term in office.
Representatives from the Red-Green Alliance, whose support the Soc Dem-led government will need to form a majority, expressed their indignation about results of the negotiation.
“It is the worst thinkable combination,” Red-Green Alliance spokesperson Per Clausen told Politiken. “It is really sad that the Social Liberals have compromised on immigration policy in order to push their economic demands through, while, at the same time, the Social Dems and Socialist People’s Party could not get the millionaire tax through.”
Regional Social Dems also voiced disappointment that their party had dropped the millionaire tax.
“It looks like the Social Liberals, with their vote, have a powerful position in the government negotiations and have gotten more influential than their mandates dictate,” Brøndby mayor Ib Terp, a Social Dem, told Jyllands-Posten.
Party leaders from the Social Dems, SF and the Social Libs are maintaining a vow of silence during negotiations to form the government and declined to comment on reports about their progress.
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