No Place for Middle Class in Lithuania

Turn on the TV, you will see how people live in Lithuania”, many like to moralize. Nevertheless, television is a simple reflection of reality. If we were to believe in television, only drunkards and politicians would live in Lithuania. The first are shown on “Farai”, “24 valandos” and “TV pagalba”. The second on “Dėmesio centre” and “Lietuva tiesiogiai”. Nevertheless, it also happens that the second ones are displayed on the same shows as the first ones.

However, neither the first nor the second ones come in such large numbers as it may seem from television, and their influence on Lithuania is highly exaggerated. Economic prosperity, security and future are created by working individuals.

The middle class” is often defined in terms of income. It is somewhere in the middle and describes neither a poor man, nor a rich man. Unfortunately, Lithuanian middle class by the standards of the Western world is considered as poor. If our politicians describe people who earn about 900 euros as rich, then people in countries to which we are trying to align are striking against such salaries.

It is wiser to define the middle class not by terms of income, but by attitude towards life. If a person works, strives and believes in being primarily responsible for his/her own destiny and not someone else, if that individual plans own finances, saves up and at least tries to escape from the “from pay to pay” circle – such a person is considered as the middle class or has all the potential to become it. If an individual wants to be a master of own fate, instead of depending on a good will of the government – he/she has traits of the middle class (even without having earned money).

Surveys show that most people ascribe themselves to the middle class, even if their income does not “keep up” with it. Such attitude is brilliant. Middle class is the foundation of the state. These are not the people who walk with their hands stretched out. They do not demand benefits or free lunch. They pay not only for their own, but for the lunch of politicians as well.

It is unfortunate, but the power does not provide the life of the middle class any ease. A simple case: why a politician does not have to pay any tax for transport, while deducting it from the taxes by a worker is prohibited? Both of them are using transport to fulfil their direct duties. However, if a company would provide a car for the worker to travel to work with, it would be taxed as “fringe benefits”. Another case: the state takes care of accommodation for a politician who has moved to Vilnius. But if a company rented an apartment for a programmer who has moved to Vilnius, taxes would apply.

Moreover, many tax-related traps are set for the middle class. Got life insurance in case of tragedy so that your family would not have to walk with their hands stretched out? Pay up. Trying to save up for retirement? Quiver, so that the government would not appropriate your money even if it is a small amount. Bought a car from your 40-percent-taxed salary which you fill up with 60-percent-taxed gasoline? Listen to how politicians hold forth about how they should tax you even more – by applying car tax. The fact that politicians who are commuting in cars, which are bought by taxpayers, and burn gasoline, which is also paid by taxpayers, are talking about it, is an additional level of irony.

Latest proposals aim to tax the salaries of the middle class even more by applying a progressive tax tariff from an amount of 1,267 euros, which are received “in hand”. Without a doubt, this is just the beginning. In the future, the amount will decrease and the tariff will increase and politicians are not even hiding it. Especially when not too long ago there was an offer to tax people who earn 888 euros by 25 percent tariff. No doubt, as soon as the socialist competition starts, we shall hear more “progressive” offers.

Some of the wealthiest people have already quietly retreated from Lithuania. The middle class is also moving, as shown by the emigration rate. Drunkards will not go anywhere as they have the conditions to engage in their activity here. Politicians will also stay, as they will not become politicians anywhere else besides Lithuania. Unfortunately, it seems that the predictions of television may become true: only those suitable for “Farai” and political debate programs will remain. Here comes the question, who will pay for the drinks of the first ones and for the cars of the second ones?

But now seriously. What the government can, or better: should do so that the middle class could live in Lithuania? Firstly, no new taxes shall be imposed and a reduction of the tax burden for those who pay for their own and others’ public services should be enforced.

Secondly, there shall be no taxation of savings and investment from which a person will pay for services – including education, healthcare and retirement, and thus such individuals will not need others to cover their expenditures.

Thirdly, people should be allowed to plan their finances. A flexible tax schedule is needed; the tax system should be convenient for those who pay taxes rather than those who collect them.

Fourthly, in terms of using public services, those who have greatly contributed should be treated differently from those who have never paid for anything. Paid high contributions to your public pension scheme? Your pension is most likely to be big. Paid a lot for public health insurance? You should at least get a wider choice than a person who did not pay anything. This would be both fair and effective.

Otherwise, why pay for something that you get for free? Why strive, work and exert yourself if doing nothing is more convenient. There will be no need to worry about your salary, nor there will be fear that politicians will take something away from you. But what will we be living on then?