People and Politics Forum 18. 06. 2010

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Germany's spending cuts - Saving the rich

Should Germany's rich pay more tax or not. The argument continues in the coalition. The gap between rich and poor is larger here than in almost every other European country. 60 percent of wealth is divided among 10 percent of households. Even in the economic crisis year of 2009 more and more people joined the ranks of the millionaires.

Our Question is:

"Should the rich pay more taxes?"

Waltraud Maassen in New Zealand thinks the rich should not be exempt from the austerity program:

"More than 60 percent of Germany's assets belong to ten percent of its households. Tax hikes for the rich should be obvious. If the rich have any say in tax reform, then they'll set it up to suit themselves and the rest will suffer any disadvantages. I put forward my proposals in the last program!"

Victor Chan from the United States says it isn't so clear-cut:

"The answer isn't about should or shouldn't. It is just that the very top earners play a greater role in shaping the tax laws with lobbyists. Given that the few very top earners have little sense of social obligations to the less well-offs, there would be little change in the tax laws. However, I do hope that the current government coalition would realize that the austerity measure won't work if the wrong sectors in the society are being targeted. It would only create more social instability without actually reducing the national deficits."

Charles Smyth from the United Kingdom says that the rich have already been targeted enough:

"The rich already pay more taxes because they buy more expensive goods and services than the poor - this spending being subject to VAT. The rich also risk their own savings with investments. Taking risks is what made them rich in the first place and any profits are subject to capital gains tax, etc. The answer is not to squeeze the 10% even more - the proletariat tried that stunt in Russia in 1917 and look how that turned out. Instead, there should be more incentives for more people to become rich."

Heinz Boschek from Canada thinks that we taxation can help create a safe world:

"Having a just and fair system of taxation is one of the cornerstones of social peace. It's obvious that the wealthy should contribute more to society than low-earners. If, for example, the people in North Korea are starving because the leaders are spending their tax money on nuclear weapons, then we have to hold on to our democratic values even tighter. That way dictators lose their premise. So in a way, taxation is a part of security policy. What we shouldn't do, however, is punish those who have achieved something in their lives. If you look at Germany from here in Toronto, it would seem that Germany is trying to do all it can to harm the rich. Angela Merkel would be a lot more popular at the G-20 conference if she put together a credible state budget."

Günter Großmann from Thailand says we have the wrong role models:

"You show us rich Swedes proudly boasting that they would gladly pay more taxes. If we want to have a social state modelled on Sweden - which was also on the verge of collapse 20 years ago - then the rich should be asked to contribute more. But who wants to follow Sweden? If you had compared our tax system with that of Switzerland, your only conclusion would have been that all Germans deserve a lot of their money back!"

Axel Werner from Germany wants to see reform of the tax system:

"We're faced with the same problem nearly everywhere: low-earners have nothing to give and the politicians are afraid to ask for more from high-earners. So the middle classes are being squeezed like a lemon (and one which hasn't got much more juice to give). It can't carry on like this forever so it's high time that all forms of income, whether it be from labour, return on investment or value added tax, be assessed together. In addition to serious attempts at eliminating loopholes, it would all be a step towards balancing the books and achieving justice."

Rene Schlesinger from Germany thinks it's nothing new:

"The austerity measures of the government are socially balanced because only a few of the money-saving schemes target public spending whereas most cuts are in the military. Fifty percent of the state budget goes on public spending so cuts are necessary. If the Hart IV budget is cut, the legal requirement will be met where people on benefit receive less than those in work. A tax on the rich has already been in existence for a long time because the upper 10% earners finance between 50-60% of the state's income from tax. So its important that the rich are content with this arrangement. Taxing assets and taxing the rich damages the economy and the labour market."

Our resident poet, Erwin Scholz from Costa Rica, thinks that our taxes should be better used:

"Giving less money,

will makes the world sunny

and stops the politicians

with their greedy ambitions.

Using money right,

will end many people's plight."

Gerhard Seeger from the Philippines has a clear answer:

Of course they should. They have enough money and don’t feel the effect of having to pay more. The low-income earners have carried the greatest tax burden for too long, while the people who can afford to pay more actually got tax breaks. The number of millionaires has risen, and so has the number of poor—maybe there’s a correlation between the two. There are examples of rich people who are willing to pay higher taxes, like the millionaire from Sweden or the older German millionaire. But it seems like the majority are greedy and don’t want to contribute. Greed is obscene—even kids know it’s bad to be greedy. Our rich people probably weren’t brought up right. They have their own political party that champions protecting the rich and greedy from higher taxes and lumbering the poor with the bill.

Herbert Fuchs from Finland agrees:

Social justice has long since become a foreign concept in Germany. Of course the high-earners should be asked to pay more, and that’s sorely needed right now. All those new millionaires in Germany profited by exploiting common people and living by the motto ‘money talks.’ The entire political leadership of Westerwelle & Co. has proven to be completely helpless.

And René Junghans from Brazil says:

Of course the rich should pay higher taxes. They didn’t just get to where they are because they’re somehow smarter than the average man. They just paid really low taxes. We’ve seen in the press that many multi-millionaires commit tax evasion. I find it incredible that the government goes easy on the rich while targeting the pensioners, the unemployed and other needy citizens with major government cutbacks. Anyone who evades their taxes deserves to go to prison, no matter how rich he or she is. They always say everyone is equal under the law, but that law only seems to apply to the rich.

The editors of 'People and Politics' reserve the right to abridge viewers' letters.