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EARNINGS

Lafontaine demands ‘millionaire tax’ to boost economy

Oskar Lafontaine, the head of the hard-line socialist Left party, on Friday demanded Germany implement a “millionaire tax” to help offset the economic impact of the financial crisis.

Published: 14 November 2008 12:05 CET
Lafontaine demands 'millionaire tax' to boost economy
Photo: DPA

“The best solution would be to increase the tax rate for yearly income above €600,000 dramatically to 80 percent,” Lafontaine told the daily Passauer Neue Presse on Friday. “Such income is 20 times higher than the average income. Any obscene profits would be covered.”

He told daily Ruhr Nachrichten Germany had plenty of scope to impose a “millionaire tax” because the “bank crisis has made the income gap an issue for the entire population.”

Lafontaine, who has never shied from suggesting populist leftist measures, also demanded the German government spend more on public programmes in order to counter the economic downturn.

“Only a massive programme – the USA and China prove that – can stop the recession now,” he said, calling Berlin’s economic recovery efforts a “mini package” of ineffective measures.

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TAXES

Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

Published: 30 October 2023 15:21 CET
Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance? 

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes. 

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner. 

How did the government agree to change the employment allowance in its coalition deal? 

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment  allowance to 12.75 percent up to a maximum rebate of 53,600 kroner. 

How might this be further increased, according to Børsen? 

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance. 

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement. 

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.  

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