The slogan “There is no right, there is no left, only Hungarians” regularly appeared at Péter Magyar’s meetings. This is an understandable policy statement because it can unite left-wing, right-wing and centrist voters. But beyond that, many people also share Gábor Török’s view that “if you look at Fidesz’s economic policy, it cannot be called exclusively right-wing”.
However, the politicians of Fidesz are extremely proud of their right-wing politics, so it is worth reviewing the fundamental features of the ruling party’s economic policy. As an exception, we should not analyze the claims of the government’s political communication, and not look at some temporary measures to maximize the vote before the elections, but rather look at the long-lasting content and essence of the policy. It then becomes apparent that Fidesz’s economic policy is in fact distinctly right-wing, the main characteristics of which are as follows.
1. Fidesz considers the income conditions established in Hungarian capitalism, more elegantly known as the market economy, to be fair, which is why it applies a single-rate, 15 percent personal income tax in a unique way in the EU. It taxes minimum wage earners and Zsolt Hernádi’s income of nearly one billion forints at the same rate.
2. Since the governing party considers the income ratios prevailing in the market economy to be fair, it guarantees the income ratios established during the active period of the employees for life in the state pension system financed from the budget. Thus, the total pension of a pensioner with half of the average pension (230,000 forints) after 6 years will be as much (154,000 forints) as the pension increase of a pensioner with twice the average pension. (Taking into account a 5 percent annual increase.)
3. The state benefit, called the 13th monthly pension, which is not supported by the payment of contributions, is paid in the same amount as the pension, because not all pensioners are of the same value. He who has more deserves more.
4. But not only does the government make unjustified distinctions between pensioners, it also does not consider pensioners to be of equal value to active workers, because they do not contribute to economic performance. Therefore, they are only entitled to a pension increase equal to inflation and do not benefit from additional income from economic growth. With this method, they can preserve the real value of their pension established at retirement, but in contrast to active workers – whose income also increases in real terms – the real value of their pension cannot increase. In 2010, the average pension was 75 percent of the net average earnings, now it is less than 50 percent.
5. According to Fidesz, capital has a more important role than workers in ensuring prosperity. Therefore, the income tax on capital is set at a lower rate than the income tax rate for employees. The corporate tax rate is 9 percent, the personal tax rate is 15 percent. In order to ensure the profitability (control) of capital, the government reduced the protection of employees in the labor code, narrowed the scope of trade unions, and disarmed the labor protection and environmental protection authorities.
The reduction of capital income resulted in the ratio of employee income in GDP falling from 43.5 percent in 2010 to 38.5 percent in 2022, according to Zoltán Pitti’s analysis, while in the EU-27 average this indicator is stable at around 47 percent. . The impact of the Orbán government’s economic policy is well characterized by the fact that between 2004 and 2023, consumption measured at purchasing power parity increased the least among the former socialist countries, by only 7 percent, and we already rank last/next to last among the EU member states in the household consumption ranking. Not because the consumption of the top 2-3 income deciles did not increase properly, but because two-thirds of society did not have enough income to increase their consumption in proportion to economic growth.
6. The Orbán government supports capital owners – especially companies representing global capital – in a larger proportion from the budget than the socially needy. In the case of grants to private individuals, citizens are not given the same benefits. Those who have sufficient income receive more support in the system of tax incentives than those who do not have an adequate income. A family with children who has enough income to buy their own apartment receives many millions of free money, but a family who doesn’t has it. (See also János Lázár: Everyone is worth what he has.)
7. An important element of Fidesz’s economic policy is the goal that the large wealth differences resulting from current income differences can be passed on to the next generation and “concrete” the resulting social differences. Therefore, even in the case of large assets, there is no obligation to pay inheritance tax in the case of lineal heirs. Moreover, gifts between immediate relatives are tax-free, regardless of the value of the assets.
8. The key element of right-wing economic policy is that it does not tax high incomes and capital, but rather consumption. The Prime Minister put it this way: “Instead of taxes on work, the government collects the money it needs in the budget through consumption. It’s a question of tax philosophy, and we don’t want to change that.”
This resulted in the current sales tax of 31.5 percent (27 percent VAT + 4.5 percent retail tax), which disproportionately affects our compatriots with lower incomes. And then we haven’t even talked about the other taxes proportional to sales revenue, which are not taxes imposed on companies – they are only the tax collectors, as is the case with VAT – but sales taxes to be paid by private individuals. These are e.g. the transaction fee to be collected by banks, the taxes charged by insurance companies and telecommunications companies. It also follows that low-income groups pay a much larger portion of their income as taxes than those with higher incomes.
It is just icing on the cake that the Orbán government inflated the consequences of the unrealistic income-raising policy before the 2022 elections by increasing sales and consumption taxes, and the beneficiaries of the income from high interest rates due to extreme inflation are also those with significant savings, i.e. the top two income earners. they belonged to tithes.
Against the right-wing economic policy of the Fidesz government, the left’s position is that income differences in capitalism are unfair, so they must be moderated. But it is also necessary to moderate the extent to which wealth differences resulting from income differences are passed on to the next generations. It is not fair that owners of capital pay a lower amount of tax on their income (profit) than employees. Citizens are equal, therefore, in the case of state benefits, the same amount of support must be given to all concerned, whether it is tax benefits for children, other housing support benefits, or the so-called 13th month pension.
Sales and consumption taxes must be established in such a way that they do not disproportionately burden the daily livelihood of low-income groups, so at least the VAT on food must be minimized.
Measures and rules are important in these matters. For example: what percentage of income differences does society consider fair and acceptable? How much property should it be and how much should the inheritance tax be? Should pensioners also share in the growing income of the economy? Is the lifelong preservation of income rates more important in the case of state pensions, or should the disproportionality of pensions be mitigated?
In his interview published in Magyar Narancs, Péter Magyar says the following about the left-right issue: “I profess the Jesus leftism. We help the downtrodden, those who are weak and hurt them, we stand up for those, no matter what minority. I am pro-market and for self-care and risk-taking must be built…..I’m not a believer in the capitalist free market, but I won’t be a believer in the state-socialist cadarism that Fidesz is doing now either.”
So, in his interpretation, Fidesz’s current policy is excessively left-wing – state socialist Kádárist – and therefore he would base his policy on self-care and risk-taking even more than the Orbán government. He does not believe in the Scandinavian redistributive model, which ensures widespread prosperity and strives for equality, but rather the Jesus-style poor support (so that no one dies of hunger).
According to his statement, Péter Magyar intends to make a meaningful compromise on taxation issues after a dialogue with experts and stakeholders. Professionals and dialogue are important, but the decision in the above questions is of a political nature and not a “professional” issue. What does the majority of society want? A Scandinavian-type state redistribution model that mitigates inequality due to capitalism, or a corrected Orbán model? Left or right? Do you want to politicize in the name of Freedom, Equality, and Fraternity, which was also mentioned at the rally held in Hősök square, or do you want to build a modified, “steal-free” Orbán right-wing system?
I did not want to subject Orbán’s economic policy to general criticism, I merely pointed out some fundamental differences in the matter of left and right. In Fidesz’s economic policy, only the pursuit of full employment and the subject-right use of certain preferential state benefits (e.g. subsidized energy prices) are left-wing. But these don’t even cover the point. (I did not touch on the fact that the leaders of the MSZP presented the left-wing positions on the above issues several times. Another issue is that they were not effective enough.)
Of course, it is also important in the political struggle that – for many reasons – the debate between the left and the right is currently not primarily related to economic, but cultural, ideological, and symbolic issues, and in these issues Hungarian society is more right-wing and nationalistic. Viktor Makón Orbán said that the question is not who is left-wing and who is right-wing, because we are all Hungarians. We can agree on that. But it does not matter at all whether the government implements a right-wing or left-wing economic policy. If the left is able to focus on the economic policy issues that most affect everyday life, then it will become clear to many that it does not matter whether it is right or left. And if it is “Hungarian”, what is its content?
The author is a former Member of Parliament, MSZP expert.
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Source: nepszava.hu
