I spotted a brief news item at the newspaper stand. And I think that the Portuguese Government has gone entirely insane.
At least, if I\’m understanding what they\’re doing properly.
They are increasing worker social security payments (our employees\’ national insurance) from 11% to 18% of wages.
No, that\’s not the insane bit.
They\’re reducing the employers\’ part of social security payments from 23% to 18% or so.
That\’s not insane either.
But to do both at the same time is insane.
For both are part of the labour share of income (the labour share of income being wages and salaries plus employer paid taxes on employment). They\’re both coming out of the same pot. OK, the changes in rates aren\’t quite symmetrical.
But the perception is that employees pay one and employers pay the other. So how politically insane do you have to be to increase the amount that the workers think they are paying, decrease the amount the workers think the employers are paying, while actually making no damn difference at all to the fact that the workers have been paying it all all along?