Exactly. So I would focus on improving that, rather than try a quick and desperate trick of tax cuts. Why not collect the taxes and then invest them wisely in great modernised services, for example?
Becuase such changes are extremely difficult and take a generation.
Easing hiring means pissing off unions, which means you piss off voters and donors.
Simplifying entry of foreign businesses and competitors means pissing off small and medium businesses, which means you piss off voters and donors.
Shrinking Portugal's notorious bloated public sector will save money, but means firing a significant number of Portuguese, which means you piss off voters.
Shrinking Portugal's notoriously large spending on social programs will save money, but means you piss off voters.
You can't just "modernize services" overnight. It requires a generation, a lot of capital, and strategy to invest in building a High Tech industry.
> Why not collect the taxes and then invest them wisely in great modernised services, for example?
Because Portugal has had an elevated debt-to-GDP ratio for almost 20 years now, which makes it extremely difficult to get the capital to do any of the above, which means a significant amount of Portugal's tax revenue is spent on servicing those debts.
The average Portuguese gets paid too little, the average Portuguese business is too small to generate significant business taxes, and every individual Portuguese person who has hireable skills has no incentive to be paid a fraction of what they would earn in London, Frankfurt, or Madrid.
Lowering taxes for early career Portuguese in order to entice them to stay until they become mid-career is the least bad option of the multiple bad options Portugal has.
Exactly. So I would focus on improving that, rather than try a quick and desperate trick of tax cuts. Why not collect the taxes and then invest them wisely in great modernised services, for example?