Hungary announces taxation plan in motion to increase population growth

Earlier this year, Donald Trump He announced that the Americans would like to have more babies and pushed forward to help it. These include expanding access to Invitro fertilization and increasing costs in areas with higher marriage and fertility.

But over the Atlantic Victor Orban, the Prime Minister of Hungary, presented a new brazen idea. He wants to introduce a lifetime income tax for all women who have two or more babies.

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“The cost of Hungary’s life is high, so the government must date families,” says Ben Habib, chairman of the Great British Political Action Commission and the former UK reform leader. “The mother makes it easier to stay at home.”

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Orban’s proposal seems to be about more than votes. Rather, the focus is on the way to correct the reduced population of the country, which decreased to 9.9 million this year, which decreased compared to 10.7 million in 1980, according to macro -tendencies. The fall is primarily due to the collapse of Hungary. In order to maintain the population, the birth rate must be at least two births per woman, experts say. But this has not happened since 1979, according to the World Bank. Birth rate for 2023 was 1.5 children per woman.

The population decline is natural development because the countries become richer, says it will win a thin, global markets strategy at Brown Brothers Harrman. “As the economies grow and more mature, the birth level decreases,” he says.

Hungarian President Victor Orban speaks during a press conference at the European Political Community summit in Puskas -Arena on November 7, 2024 in Budapest, Hungary. (Inos Kummer / Getty Images / Getty Images)

And here the ideas of Orban begin, because the publication of money can help increase fertility. “If there is no biological reason in the birth rate, you can change it, but you need to have incentives,” says Robert Wright, Professor of the Central Michigan economy.

Hungary has already scale subsidies for families with children. For example, bilateral families with one child receive 12,200 Hungarian baskets (32 dollars) per month for this child, while the couples with three or more children receive 16,000 ($ 41.60) per month, the Hungary government reports. Lonely parents and those with children with disabilities or long -term diseases receive more money. There are other benefits, including without interest loans for young women.

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On Wednesday, December 21, 2022, elderly customers are in line on the food counter in the Great Market Hall in Budapest, Hungary. (Akos Stiller / Bloomberg via Getty Images / Getty Images)

It may seem awesome to have a sliding scale, but there is some logic. According to the family, in the family, costs can even grow quickly, says Pete Earl, Director of Economics and Economic Freedom of the American Institute for Economic Research. “If there are three children, they will need a house, not just an apartment,” he says. You can also see the need for big cars to cross children to school and school.

The new Orban’s proposal to eliminate income tax for the mother of two or more children may be even more generous than the current subsidies. “What it offers is even more, especially for high-income people,” says Wright.

However, the fall of the population is not the only problem of Hungary. Recently, the country has transferred economic problems that will subsidize people to be even more complicated. These include slow growth, high inflation and lack of foreign investment.

In 2023, GDP signed a 0.9% contract and increased by a modest 0.5% last year, according to the trade economy. The government also registered a deficit of 6.7% of GDP in 2023, and then approximately 5%, which is likely to be similar this year. Meanwhile, the country’s inflation is growing. In January, it was 5.5% compared to 3% in September.

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A newborn boy yawns when he sits with his mother. (Photo by Jessica Rinaldi / Boston Globe via Getty Images / Getty Images)

“Hungary has an extremely large budget deficit, so I don’t know how they are doing to afford a new Orban proposal,” Earl says.

However, the proposal of Orban, although different from Trump, is likely to help ensure a closer connection between the US and Hungary. “Orban is one of the winners in the US election,” says Mark Chandler, Bannockburn Global Forex, Chief Market Strategist.