GERMANY/ When the rich ask to pay more
A group of German millionaires has called for higher tax rates to be applied to them and their assets. Dieter Lehmkuhl, the founder of the movement, conveys this startling proposal, to which sixty super-rich Germans adhere, to Ilsussidiario.net.
Could you please illustrate the main points of your group's proposal?
We, as a group of now 61 wealthy Germans who own more than €500.000 in assets, call for a temporary 10% capital levy on all assets for the next two years (5% each year), a limit of 500.000 per person being exempted. This tax will affect the top richest 2-3% of the population and would generate about €160 Billion for the federal budget. The revenue of this tax should not fill the general budget but be restricted for investments in a New Green Deal, i.e. the badly needed reshaping of economy to ecological ends, in education, public infrastructure and social services like health care and social welfare. After two years, the temporary asset tax should be replaced by a regular asset tax of at least 1% per year with an expected annual revenue of about € 16 Billion.
Does the temporary asset tax you are proposing concern financial assets only or will it affect other properties as well?
The tax shall include all assets, including real estate and also business property beyond a threshold of €3 million. The effort to calculate the value of luxury goods in this tax will probably be too costly to include them. With our proposal from 2009 in first place we wanted to initiate a broad public debate, and now we see a nationwide broad alliance for fairer redistribution to set the agenda for the next national election.
What are the main reasons why the gap between the poor and the rich in Germany has widened deeply during the last 15 years?
There are several reasons. One is the permanent tax reduction policy of all past governments that mainly privileged enterprises and the rich. In no other western country the Gini coefficient - the measure of inequality in a society - has risen so much as in Germany. Secondly, an increasing portion of the primary income distribution has gone more to the rich. The incomes of top managers were in the late ‘70ies 20 times the incomes of normal employees; the proportion is now 60 to 120 fold, while the top income tax rate have decreased from 56% to 42 (45)%. In contrast, the real incomes of most Germans have stagnated or even decreased.
Are these two trends correlated?