On the European level, Luxembourg was in second place after Romania last year. Young people between 18 and 24 and single parents are most affected. “Working poor” is defined as someone earning less than 60% of the median income who has worked in the last 7 months.
Cross-border workers are not included in the stats. And with many low income families moving across the border to avoid high housing costs, the numbers are not even representing reality in Luxembourg.
Adapting tax scales to high prices and tax relief for single parents are needed now
There are many factors contributing to this, housing prices being a crucial one. In 2019, a third of tenants spent more than 40% of their salary on housing, up from a quarter in 2016. Politicians are not taking the problem seriously enough, says Reckinger.
A tax reform is needed to remove inequalities, such as salaries being being taxed at 100%, but capital only at 50%. The tax scale should also be extended towards high salaries, while single parents should get tax relief.
But politicians are short-sighted in this respect, just as with the climate. “If we want to tackle the big challenges of society, we need a socially fair and ecological vision of the future, and tax reform is part of that,” Reckinger says.
The recent measures are selective, limited in time and decided as an emergency response. What is needed is a far-reaching discussion on how we want to live in our country.
