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Wealthy Germans launch petition for higher taxes

Some rich Germans have launched a web petition to call for the resumption of a wealth tax to help the country bounce back from an economic crisis, because, as one said, he had "a lot of money I do not need."

Published: 22 October 2009 15:24 CEST
Wealthy Germans launch petition for higher taxes
Members of the initiative with fake notes symbolising Germany's debt. Photo: DPA

The text, posted at www.appell-vermoegensabgabe.de, has been signed by 44 people who want to convince the government of newly re-elected Chancellor Angela Merkel to raise their taxes.

For retired doctor Dieter Lehmkuhl, 66, it is time the wealthy came to the aid of their country. He reckons that if the 2.2 million Germans who have personal fortunes of more than €500,000 ($750,000) paid a tax of five percent this year and next, it would provide the state with €100 billion.

Lehmkuhl got the idea when Berlin stumped up billions of euros to save banks and give the recession-hit economy a boost.

“It made me mad to think that we suddenly found all this money for the banks, money that we did not have before for urgent programmes like education and the environment,” the left of centre weekly Die Zeit quoted him as saying.

The former doctor would like Germany to have its own version of the the US group United for a Fair Economy (UFA), which includes around 700 wealthy US residents, according to the Berlin daily Der Tagesspiegel.

His plan would see a five percent tax for two years to fund specific projects followed by a reduction to one percent, the level of the tax when it was abandoned in 1997. Germany still slaps a 25 percent levy on capital gains.

One signer, 69-year-old Peter Vollmer told AFP he backed the petition because he had inherited “a lot of money I do not need.”

Following her September 27 election victory, Merkel and her conservative Christian Democrats are currently locked in talks hammering out a common programme with their new partners, the pro-business Free Democrats (FDP).

The FDP promised €35 billion in tax cuts in its election campaign, but with Germany’s public finances shot to bits by the recession, Merkel’s party is wary of agreeing to such reductions.

On Wednesday, Lehmkuhl, Vollmer and a few friends held a rally in the Tiergarten park in central Berlin, throwing fake banknotes into the air for photographers in what they called a bid to provoke discussion of the idea.

“It’s really strange that so few people came,” Vollmer said.

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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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