So we have a new centre-right government and, despite previous promises, a new extraordinary income tax, on the 14th monthly pay check (I guess a southern oddity but already factored in by international wage comparisons). The tax is biased against the lower strata of the population, as it is almost flat above 3,000 euro monthly wage or so, and dividends and profits are exempt. Not a very well designed tax, one should say.
The EU/IMF/ECB troika didn't ask for it, at least until now. So, the key question is: should the government of a distressed country, such as Portugal, going through an already massive restructuring program, compress further the economy before it is necessary? Or should it have waited and see whether it would be necessary? The more I think about it, the more I get close to the conclusion that the move was in the wrong direction.
I think I still prefer to be ruled by policies set in Brussels then by too imaginative local officials. At least in Brussels they do not follow so closely the electoral cycle, which may be one of the reasons why the Portuguese government acted as it did on this matter. In fact, it looks as if they were following the same old rule of doing the hard stuff at the beginning of the electoral cycle to ease up later one. Unfortunately, in this juncture, that may have considerable negative macroeconomic effects.