The Bulgarian right – raises taxes and spends more

For those familiar with the nature and history of major political movements in the US and UK, it is clear that one of the main elements of what is considered "right" is the so-called fiscal conservatism. The idea that the state apparatus should (at a minimum) spend as much as it can collect through the tax system, and in certain interpretations, that it should strive to limit as much as possible the seizure of income from the population for the benefit of politicians and bureaucrats.

Fiscal conservatism is also an invariable part of the legacy of two of the most prominent figures in the history of world politics - British Prime Minister Margaret Thatcher and American President Ronald Reagan. It is no coincidence that, according to the Iron Lady, “the problem with socialism is that other people’s money runs out” or that the cowboy from Santa Barbara believed that it was “time to cut the federal budget and leave the family budget alone”. The right is inherently connected with limiting the colossal appetite for foreign money that torments every government and every state administration.

Unfortunately, this information was not conveyed to Boyko Borisov and other key figures in GERB. In recent weeks, they have been trying hard to be the opposite of what the Thatcher and Reagan right represents, not only backing down from fiscal conservatism, but moving full throttle in the opposite direction.

Things started to become clear with Borisov's statements about 6 billion leva and even 10 billion leva of debt that a possible (and quite likely) GERB government will want to take on. This is the easiest solution when during your previous mandate you spent a significant part of the reserves and nationalized an element of the private pension system – and this under the Minister of Finance, Simeon Dyankov, who at least tried to sound like he wanted to balance expenses and not allow complete waste. And where will you get it from when you also increase the debt burden, beyond the possibilities for its easy financing?

In addition to debt, as it became clear two days ago, GERB is also preparing another categorically left-wing policy – increasing taxes. According to the proposed scheme, municipalities will be able to decide to add an additional 2% to the flat tax, which is currently 10%. Although the idea of diversifying the tax rate and the possibility of decentralizing the collected funds, and hence creating competition between different municipalities in the country, is interesting – the implementation has serious shortcomings. Mostly because it allows jurisdictions to become only less competitive – i.e. it is not intended to reduce taxes and/or retain a larger percentage of what is collected at the local level.

In fact, even without GERB's program, which is greedy for taxpayers' money, the state budget is seriously overspending compared to what it can provide through taxes and quasi-taxes. The data until July of this year alone show a deficit of nearly 1.15 billion leva. The total overspending on the two items salaries/scholarships and social expenses is 938.5 million leva (274.5 million leva for the first and 664 million leva for the second). To this we can add the demands for millions more additional spending in the National Health Insurance Fund (117 million leva) and the Ministry of Interior (97 million leva) - all at the expense of the taxpayer and his heirs. [1]

The reaction of a fiscally conservative, a "right" party at such a moment should be - searching for possible ways to limit the avalanche-like growing costs, not searching for short-term political comfort provided by loans that future generations will repay. In addition to economic theory, from the recent experience of more than one European country, we know that loans and uncontrolled spending are only temporary - they are followed by recessions and painful years of returning to normal.

It is appropriate to end with a useful quote from Reagan about the "right" of GERB: "The problem is not that the people are taxed too little, but that the government spends too much." It may also help them orient themselves, or redirect the attention of right-wing voters to the search for a truly fiscally conservative political entity.

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