When Poland’s President Karol Nawrocki signed the new law in August 2025 granting full income tax exemption for families with at least two children, it appeared to be a major political move.
A campaign promise fulfilled.
A clear signal to families.
And an emotionally powerful message: “We are relieving parents who carry our future.”
But on closer inspection, one thing becomes clear:
The concept misses those who need support the most.
The Promise: More Money for Families, More Incentive to Work
The idea sounds simple and appealing:
Families with two or more children pay no income tax up to a combined annual income of around €66,000.
According to calculations by the President’s Office, an average family benefits from around 1,000 PLN (€235) in additional monthly income.
The stated goals:
- Reduce the tax burden
- Increase disposable income
- Boost consumption
- Encourage employment
A strong narrative that resonates well in social policy debates.
But this is exactly where the problem lies.
The Problem: Tax Exemptions Mainly Benefit High Earners
Low-income households already pay little or no income tax and therefore receive no meaningful relief.
Higher-income families, however, save hundreds of euros every month.
Example:
- Family with 7,000 PLN income → 395 PLN relief
- Family with 12,000 PLN income → 913 PLN relief
The result:
👉 The reform is socially regressive, widening the gap between rich and poor instead of closing it.
👉 The label “family support” effectively becomes a tax subsidy for the middle and upper income groups.
Financial Reality: Expensive but Poorly Targeted
According to the Ministry of Finance, the program could cost up to €7 billion per year.
The planned counter-financing through a so-called “tightening of the tax system” amounting to €3.2 billion is widely regarded by experts as unrealistic.
This raises a critical question:
How long can a state afford a policy that costs a lot but delivers little?
Forgotten Groups: Single Parents and Low-Income Workers
Another major issue:
- Single parents receive nothing
- Childless low-income earners are excluded
- Low-wage families, who already pay no income tax, get no additional support at all
This is socially problematic and politically risky. It sends a clear message:
“The more you earn, the more we support you.”
How the System Could Be Made Fairer
If the real goal is to strengthen families and reward work, the concept needs adjustment.
Here are five concrete reform proposals that combine social fairness with financial sustainability:
-
Income-based scaling
- Full tax exemption only up to a defined income threshold (e.g. 5,000 PLN per month).
- Gradual reduction above that level.
- Everyone benefits, but low-income households benefit the most.
-
Combination of tax relief and child bonus
- Families who pay no income tax could receive a direct allowance (e.g. 500–700 PLN per month).
- This creates real relief for low earners.
-
Additional support for single parents
- An extra allowance or bonus would reduce social inequality.
-
Incentives for employment
- Tax exemptions only for parents with verified employment (including part-time).
- This rewards work, not just family status.
-
Clearer communication strategy
- Move away from “zero tax for families”
- Toward “family bonuses for working low- and middle-income households”
- More credible, fairer, and economically sound.
Conclusion: Symbolically Strong, Socially Weak
President Nawrocki’s reform is a textbook example of well-intentioned but poorly targeted social policy.
Big gestures, wrong impact.
The key takeaway:
Social justice is not created through blanket tax exemptions, but through targeted relief where it is truly needed.
And that would not only be socially fair, but also economically smart.
Top comments (0)