Gfk (an Austrian polling firm) performed on behalf of Swiss Life Select a survey about the use of tax saving starting with 2016: Only 25% of the Austrians want to spend their additional money for consumption immediately. The Austrian Government assumed in its calculations of the tax reform a massive consumption-plus to boost the economy creating additional jobs covering counterpart funding. The government intervention of cutting income tax may or may not increase consumption. In fact, it depends on the (individual) person’s time preference: the current one seems to be low compared to the future time-preference, and its tendency (probability) to keep the available additional money is high. In other words, the time-preference is indirectly connected with the relative propensity of a person. The conclusion is: a sustainable increase in quantitative and qualitative consumption level requires a change in the behavior of individual persons. More important than direct government intervention is, therefore, that the citizens trust the institutions (state, city, municipalities, government, ministries, judiciary, tax office, unions, commercial departments, social insurance, etc.) again. The biggest challenge for institutions to win back the trust of their citizen is to act “sustainable” (TBL: People, Planet, Profit) and to provide fairness and equal opportunities for all persons whether it is in a developed, not developed or emerging country.
Roland Leithenmayr, VfV