The government's latest bright ideas to combat Poland's dangerously growing budget deficit are somewhat worrying.

The first is a common refrain during public finance crises – raise taxes for top earners. According to unofficial information published by Gazeta Wyborcza, the government is working on a plan which would see taxpayers making retirement and disability contributions all year long, regardless of how much they earn. The changes would affect anyone earning more than zł.8,000 monthly.

At present, retirement and disability contribution commitments are satisfied at the point when income for the year reaches the level of zł.95,000, be that in November or February.

By ignoring that threshold, around zł.1.3 billion in additional funds would pour into Poland's Social Insurance Fund, which has had to take around zł.6 billion in credit in order to cover its obligations. However, the net gain would amount to around zł.1 billion after personal income tax losses were taken into account.

According to government estimates, this change would affect around 290,000 taxpayers. Those earning around zł.9,000 gross a month would have to pay in an additional zł.185 or so. People in the zł.15,000 a month range would lose around zł.1,264 yearly and anyone earning zł.95,000 a month would pay in an extra zł.15,664.

The Finance Ministry is apparently tinkering with the plan at present; it is expected to be ready for inter-ministerial consultations this month.

Nor is this the government's only new budget-fixing concept. Speaking to Polish Radio's Program 3, Michał Boni, a minister without portfolio in the Prime Minister's Chancellery, mooted the possibility of adjusting the very concept of public debt in order to sidestep the 55 percent public debt-to-GDP threshold entrenched in Polish law.

The government's most recent estimate puts public debt in 2010 at a precarious 54.7 percent of GDP. Other estimates – notably that of the European Commission – suggest that public debt will exceed the 55 percent threshold, triggering austerity measures.

In order to avoid this, Minister Boni noted that the government is exploring an idea proposed by the Institute for Structural Research, which would see three definitions for public debt implemented. Doing so would mean that a previous idea – steering pension contributions away from open pension funds into the Social Insurance Institution – would not be necessary.

Mr Boni cited an OECD advisor, claiming that each country can define public debt for itself. “This is a good idea and it's not merely creative accounting, because it very transparently, clearly elaborates which of the selected items are the causes of the public debt ... It seems to me that the proposal is worth considering,” he said.

E. Blake Berry