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Germany raising taxes on business?

by whataboutbob Tue Apr 18th, 2006 at 07:25:41 AM EST

Sounds like it, based on this FT article dug up by Fran in this morning's European Breakfast: New SPD leader seeks to put party stamp on reforms

Kurt Beck, new leader of Germany's Social Democrats, favours tax increases and restrictions on hedge funds, and wants to restore a clean-cut image to political life. Mr Beck told Der Spiegel, the weekly news magazine, that current tax rates, criticised by big business as excessive, were too low and would have to rise to fund public-sector investment.

"We can't make the republic fit for the future with the current tax rate of less than 20 per cent, especially in the light of demographic developments and the huge challenges in the education sector."

He suggested there should be tax rises above and beyond the planned increase from 16 to 19 per cent in VAT, due next year. "We simply need more money for investment. Otherwise, existing infrastructure risks falling into decay." (...)

The remarks are proof of Mr Beck's pledge last week to raise the SPD's profile in the coalition and ensure a clear "Social Democratic signature" on reforms.

I dunno, but somehow I find the news that business needs more taxes refreshing. What do you think, is it a good idea or not?

We haven't heard much news about Germany lately, and whenever we do hear any news about business in general, it always seems to be yet another push by business to get more favorable terms. So, I find it of interest that the world's largest exporting nation, Germany, is talking in other terms. Not a particularly sexy topic, but refreshing, nonetheless.

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Tue Apr 18th, 2006 at 08:09:07 AM EST
I'm not sure how to understand Beck's suggestion to increase taxes. Who is addressed, consumers or big business? Generally I'm all for a powerful state, but I think another increase of the VAT will be to the detriment rather than to the benefit of the general public. The state needs more money and should get it, but from those with high incomes and assets.
by Wolke on Tue Apr 18th, 2006 at 10:18:01 AM EST
"Hedge funds must be restrained through national, or better still European, legislation so that we no longer have to accept destructive attacks on sound companies as god-given," Mr Beck said.


by Wolke on Tue Apr 18th, 2006 at 10:19:03 AM EST
It's also about time things like the Tobin Tax (and analogues taxing short-term stock trade) were implemented.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Tue Apr 18th, 2006 at 10:27:39 AM EST
[ Parent ]
It's certainly refreshing to hear a mainstream politician reminding corporations that the state is not their bitch (pardon my French). Beyond that, I'm less convinced by the particulars.

As I noted before, the main issue with the taxation of corporations is not so much the nominal rate but the maze of exemptions and deductions that litter tax codes and the ability of multinationals to shuffle profits and looses between different jurisdictions by accounting games. Raising the nominal rate will hit only corporations too small to afford top-notch lawyers and tax specialists.
by Francois in Paris on Wed Apr 19th, 2006 at 12:18:15 AM EST

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