Polish sausage
"The Polish Deal is a great program of civilizational change that will affect all of Poland, all social groups," says Deputy Prime Minister and President of Law and Justice Jarosław Kaczyński. And Prime Minister Mateusz Morawiecki adds: "We have changed it! We have changed money without coverage, i.e. empty promises of our predecessors, into the hard currency of fulfilled obligations towards Poles. This has been the nature of the Polish Deal from the very beginning."
It doesn't matter to me whether these two leaders, by God's grace, believe in what they say or deliberately manipulate the opinion of Poles. "Polish Deal" is Kaczyński's desperate prelude to the fight to maintain power for another term in office, according to the principle: we have empty pockets, so we can't give anything to the lowest earners, i.e. our voters, but we can reduce their taxes and fill the hole created by this by milking the highest earners and entrepreneurs running businesses. It takes exceptional cynicism to call such a strategy a civilizational change.
An employee earning the minimum wage, i.e. PLN 3,010 gross per month, will receive a net salary higher by PLN 154 (it will be PLN 2,354) thanks to the Polish Deal. A person earning PLN 4,000 gross will receive a net salary higher by PLN 114 (it will be PLN 3,022), and a person earning PLN 5,000 will receive a net salary higher by PLN 47 (it will be PLN 3,660). For those earning between PLN 6,000 and PLN 13,000, the Polish Deal will be neutral. Those earning more than PLN 13,000 will lose more, the more they earn. Those earning PLN 15,000 will lose PLN 167 per month (new net PLN 9,752), 20,000 will lose PLN 554 per month (new net PLN 12,742), 25,000 will lose PLN 942 per month (new net PLN 15,692), 30,000 will lose PLN 1,329 per month (new net PLN 18,642), 40,000 will lose PLN 2,204 per month (new net PLN 24,542), 50,000 will lose PLN 2,879 per month (new net PLN 30,442).
Pensioners receiving a gross pension of PLN 2,000 will receive PLN 141 more net per month (PLN 1,820) thanks to the Polish Deal. Those receiving PLN 2,500 gross will receive PLN 187 more (new net is PLN 2,275), those receiving PLN 3,000 gross will receive PLN 149 more (new net is PLN 2,645). Those receiving PLN 4,000 gross will receive PLN 71 more (new net is PLN 3,385). Those receiving pensions greater than PLN 5,000 will lose net. At PLN 5,000 gross, the loss is PLN 6 per month (net PLN 4,125), at PLN 6,000 gross – the loss is PLN 84 (net PLN 4,865), at PLN 7,000 gross – the loss is PLN 161 (net PLN 5,605), at PLN 8,000 gross – the loss is PLN 239 (net PLN 6,345), at PLN 9,000 gross – the loss is PLN 316 (net PLN 7,085, at PLN 10,000 gross – the loss is PLN 394 (net PLN 7,825).
People employed under a contract for services will lose. When carrying out a contract for services in the amount of PLN 5,000 gross per month, the loss will amount to PLN 58 (new net PLN 3,660), PLN 10,000 gross – the loss will amount to PLN 538 (new net PLN 6,853), PLN 20,000 gross – the loss will amount to PLN 1,639 (new net PLN 12,742), PLN 30,000 gross – the loss will amount to PLN 3,054 (new net PLN 18,642).
In the case of business activity taxed under general rules with monthly revenues (excluding VAT) of PLN 10,000 and assuming zero costs, the monthly loss in net income is PLN 289 (new net is PLN 6,817), with revenues of PLN 15,000 the monthly loss is PLN 504 (new net is PLN 9,981), with revenues of PLN 20,000 the monthly loss is PLN 810 (new net is PLN 13,075), and with revenues of PLN 30,000 the monthly loss is PLN 1,422 (net PLN 19,263).
In the case of business activity taxed with a flat tax with monthly revenues (excluding VAT) of PLN 10,000 and assuming zero costs, the monthly loss in net income is PLN 435 (new net is PLN 6,741), with revenues of PLN 15,000 the monthly loss is PLN 1,245 (new net is PLN 9,981), with revenues of PLN 20,000 the monthly loss is PLN 2,201 (new net is PLN 13,075), and with revenues of PLN 30,000 the monthly loss is PLN 4,113 (net PLN 19,263).
In the case of business activity taxed at a flat rate with monthly revenues (excluding VAT) of PLN 10,000 and assuming a flat rate of 17%, the monthly loss in net income is PLN 442 (new net is PLN 6,912), with revenues of PLN 15,000 the monthly loss is PLN 442 (new net is PLN 11,504), with revenues of PLN 20,000 the monthly loss is PLN 352 (new net is PLN 15,212), and with revenues of PLN 30,000 the monthly loss is PLN 839 (net PLN 23,115).
The unfortunate consequence of the Polish Deal will be the huge impoverishment of Polish municipalities and counties. As is known, the main source of income for municipalities and counties is the PIT tax paid by taxpayers residing in the commune and county and the CIT tax paid by companies operating in the commune and county. Around 40% of PIT and 6% of CIT remain in the commune. To illustrate the problem of impoverishment of municipalities as a result of the implementation of the Polish Deal, let us consider a simple example. Let us take a commune in which there are few companies paying CIT, in which 10,000 people live, of whom 2,000 are pensioners receiving a pension of PLN 2,500, and 2,000 are employees receiving the minimum wage of PLN 3,010, and the remaining 6,000 are unemployed and children. This is a fairly representative Polish commune. Before the Polish Deal was implemented, these 2,000 retirees and 2,000 working people paid about PLN 8 million in personal income tax annually. 60% of this amount, or about PLN 4.8 million, went to Warsaw and constituted the income of the central budget, and 40%, or about PLN 3.2 million, remained in the municipal coffers, constituting its main income, which then returned to the residents anyway, because after all, this money is used to build municipal roads and sidewalks. After the Polish Deal was implemented, the personal income tax paid by these 4,000 citizens will be zero - these citizens will pay zero tax. These PLN 8 million will indeed remain in the pockets of the residents, but the municipal coffers will be empty. However, the residents will only notice this with a certain delay, because the effects of this impoverishment will appear in the municipal budget from 2023.
From the above, it is clear that the Polish Deal is clearly nothing more than a PiS election sausage for the upcoming elections and another stage in the destruction of Poland, this time based on three fundamental pillars: raise taxes on the highest earners, slaughter sole proprietorships, starve municipal budgets. The name "Polish Deal" is therefore exceptionally inappropriate. I would use the term, perhaps a bit too long, but well-reflecting the idea of this undertaking, "Polish Electoral Sausage for the Lowest Earners at the Expense of Entrepreneurs Running Sole Proprietorships Who Earn a Lot and for Money". The number of beneficiaries of the Polish Sausage is several million Poles, because 90% of Polish taxpayers earn less than PLN 6,000, and 90% of pensioners receive pensions below PLN 5,000.
Will Polska Kiełbasaska work? In my opinion, not really. Firstly, because this profit for a single citizen is a maximum of around 180 zlotys, and on average it is not much more than 100 zlotys per month - this is incomparably less money than the flagship PIS program that gave Kaczyński power, i.e. 500+. Secondly, it is one thing to get extra money from the government, and another to get relief on the tax paid every month. Thirdly, and finally, it is galloping inflation that spoils the whole effect. Whether it works or not - we'll see. For now, let's get down to eating. Enjoy your meal.
