Posted Aug 27, 2019 by Martin Armstrong
Acting SPD leader Thorsten Schäfer-Gümbel has drafted a concept for a wealth tax. He is proposing that this will bring the federal government €10 billion annually. He has argued that the rich have disproportionately benefited from the economic situation in recent years while the average person has struggled. He claims many even benefited from the financial market crisis of 2008/2009. Therefore, they should be punished with higher taxes more than 10 years later for the rest of their lives. Interestingly, very few people benefited from the 2008/2009 crisis unless they were a short player and those you can count on one hand. The banks are still insolvent in case he hasn’t noticed.
Schäfer-Gümbel claims the money will be used for necessary investments in infrastructure, housing for the refugees, and of course climate change. The excuses are endless. But the truth is that the state and local governments are broke with over 50% in dire need of capital. They cannot create money and the German people are already severely taxed to the point where they rank only #3 from the bottom in net worth within Europe.
The hunt for taxes has always ended in revolution. This is not a trend governments should be following. The system is just unsustainable as is. We need someone for once to look at the viability going forward. The solution is not to raise taxes to meet next month’s rent time and time again.