by Paolo Valentino
Debate on the aid program against the expensive 200 billion notes opened in Berlin
There is a debate in Berlin. It was opened by a very German institution that is not suspicious of benevolent prejudices against a redistributive fiscal policy, let alone sympathies for the left. It is the Council of Economic Experts, the five ‘wise men’, who advise parliament and government on economic issues and publish a report every November that is considered an indispensable reference for policy-makers. But the one just published immediately became political explosives and triggered a passionate discussion in the media and in society. In fact, the wise men of Olaf Scholz’s government have suggested raising taxes on the wealthiest to fund the €200 billion plan launched at the end of September to stave off expensive energy. The reasoning is simple: Since the measures to compensate for bill increases apply erga omnes, but only low and middle earners are urgently dependent on state aid, it is right to take countermeasures on the revenue side.
The Wise Men propose three possible solutions: an increase in the maximum rate, a solidarity levy on higher incomes, or a postponement of the government’s proposed tax cut plans. But be careful, council member Monika Schnitzer warns, “the tax works if it is only aimed at the richest and is limited in time; therefore it must start together with the aid package and thus end in 2024. The proposal, praised by Greens and Social Democrats, was opposed by finance minister, the liberal Christian Lindner, who said “it would be dangerous to increase the tax burden in times of economic uncertainty”. But someone remembers that in 1952, when 1% of Germans owned a quarter of the national wealth, the ultra-conservative Chancellor Adenauer imposed an additional 1.67% solidarity tax on the wealthiest, which remained in effect for 30 years. The German economy does not appear to have been adversely affected.
November 11, 2022 (change November 11, 2022 | 21:04)
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