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Image: Fotolia/Stefan Balk

Taxing the rich

Peter Stützle /ai
August 6, 2012

An alliance of left-wing social organizations and unions is demanding more money fron the well-off: higher taxes on assets and high incomes to help ease the debt crisis.


It all began with Attac, an activist group critical of globalization that was originally formed to push for taxes on currency transactions. Numerous unions and social organizations, mostly from the left of the political spectrum, have since joined the cause, demanding higher taxes for the rich to help overcome the crisis, combat government debt and secure the welfare state.

Jutta Sundermann, co-founder of Attac Germany, is highly critical of the current government's policies. "We have already learned from the debt crisis in the developing world that it's not possible to get out of a crisis with cuts and austerity measures." Instead, she advocates governments increasing tax revenues.

In the past, she says, there's been a dramatic shift of wealth and property from the public to private coffers. "Today, we have some two trillion euros debt on the federal, regional and local levels - that's roughly the amount of money that the richest one percent of Germans own."

Jutta Sundermann
Attac's Sundermann wants the richest one percent to be forced to helpImage: J.Schwengsbier

"Welfare state about to crash"

Germany's Paritätischer association, the umbrella group for the country's around 10,000 charitable organizations, is for the first time in its history throwing its weight behind a call to action like this. Its head, Ulrich Schneider, says the group is worried that Berlin's balanced budget amendment - the plan not to add any more debt after 2020 - means that the "welfare state is about to crash."

While he says that it is good that the government is trying to not leave too much debt to subsequent generations, this wouldn't make sense if it also meant leaving them with broken schools and kindergartens, closed-down public libraries and run-down playgrounds.

Frank Bsirske, head of the Verdi union, believes the reason for the current financial crisis is to be found in the "past 15 to 20 years' systematic financial relief for wealth, top salaries, and company revenues." Successive governments have all supported this development, he says.

Without a major tax cut from 1998, for instance, the government would have an annual 50 billion euros, Bsirske says. But this calculation does not take into account the fact that the country's economic development might have been different without the tax breaks.

Tailwind from France

Frank Bsirske, Jutta Sundermann and Ulrich Schneider
'Redistribution - tax the wealthy' is what the alliance is calling forImage: dapd

The Paritätischer plans a day of action at the end of September with the motto "Redistribution - tax the wealthy." In concrete terms, it is calling for the reintroduction of a wealth tax that had been ditched in 1996, higher income taxes for the wealthy, more taxes on company revenues and capital gains as well as a tax for transactions on financial markets.

The alliance is also calling for a one-time levy on large assets. Such a levy was suggested recently by the German Institute for Economic Research.

The activists see themselves confirmed by new French President Francois Hollande, who has also initiated higher taxes for the country's top earners. German Social Democrats and Green Party members are also increasingly in favor of such measures. In the past it's only been the Left Party, successor to the East German communist party, that's been outspoken about higher taxes for the rich.

But by now, even members of the governing coalition's center-right Christian Democrats and pro-market Free Democrats are willing to consider plans to get more contributions from the better-off.

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