The German Institute for Economic Research (DIW) calculated that if the wealthier members of society were taxed a one-off chunk of ten percent of their fortunes over and above €250,000 per head, it could make a real difference to reducing the country's debt.
The tax could even be tied into a mandatory bond scheme – where the state promises to pay back the money with interest as and when it can.
The idea is that such a “capital levy” – a one-off wealth tax – would only benefit the economy as it would not reduce all-important consumer demand. Reasonable personal allowances would be drawn up to make sure the tax does not impoverish people, and there would be measures to protect businesses.
But could such a tactic destroy trust and faith in the system? Would it encourage rich people to hide their wealth, or even leave the country? Is it the kind of ‘eat the rich’ solution offered up in student debates?
A writer at the Frankfurter Rundschau argued that those hit by the levy would also be those who would most benefit most from a stabilisation of the financial system and expensive bank bailouts.
Would it be fair to expect the wealthiest among us to contribute to keeping the national debt to sustainable levels and so help keep the crisis from crossing Germany’s borders? Or would Germany be shooting itself in the foot?
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