Pension tax

The Constitutional Court told us on Fri. what we have all known for years. Namely, that Czech "social insurance" isn't insurance at all. It's merely a tax by another name. The Court argued in effect that pension payouts to high wage-earners are too low and need to be raised to avoid discrimination. Some politicians immediately started talking about the added costs this would bring to the state budget, but Finance Minister Eduard Janota identified it as mainly a matter of semantics. If we start calling it a tax, he said, nothing else will need to change. ČSSD jumped on the idea too. It's the most likely outcome, but it's a dangerous one. Removing any pretense of a correlation between pension contributions and pension payouts would be like going off the gold standard. Lawmakers would have no restraints and would be able to freely devalue your pension, just as central bankers have devalued your money.