Germany, Land of the Lost

As I was reading this I couldn't help but think that you could substitute "California" for "Germany" and "Democrats" for the SDP and CDU parties and largely remain accurate. What's striking about this is that the overwhelming statistical evidence points to increasing tax revenues at low tax rates, yet Europe's socialists still cling to the notion that they can tax their way to utopia. Ain't gonna happen. Can you imagine what a 20% sales tax (hell, even the current 16%) will do to consumption?

Link: TCS: Tech Central Station - Land of the Lost.

Once elections are on the horizon, politicians tend to indulge in populism. The latest outgrowth of this is the proposal of Gerhard Schr�der's Social Democrats and their Green coalition partners to levy a special tax on the wealthy. This populist tax-and-spend attitude has energized Angela Merkel's Christian Democrats -- but not in the way one might expect from a conservative party. Instead of arguing against further tax increases on Germany's taxpayers, many of the big shots in the CDU are now coming up with tax hike schemes of their own, the most popular one these days being an increase in the country's value added tax (VAT).

Comments

[Paul J.]

This whole political and tax issue is really becoming something of a farce here in Germany. It is quite clear that the powers-that-be have no f**king clue how to run a country.

[Paul J.]

This whole political and tax issue is really becoming something of a farce here in Germany. It is quite clear that the powers-that-be have no f**king clue how to run a country.

[Rolf]

Sorry Jeff, but your comparison is off here. I am intimately familiar with the European tax system (lived there for 24 years before moving to the States) and I don't like it. But to suggest that California/Democrats are in the same boat is plain wrong. At the end of the day, there is a decision to make regarding the balance we strike between economic efficiency (which is mostly negatively affected by taxes) and some form of social justice (which can be positively affected by taxes). Europe has been on one side of it and is slowly moving closer to the US perspective, which I applaud. California and the Democrats are still well clear of the current European position on taxes and government influence (although I am sure you’ll be able to point out one or two "Democratic socialists"….) My personal pick would be somewhere in the Atlantic, 2/3 on the way to the US :)

[Rolf]

Sorry Jeff, but your comparison is off here. I am intimately familiar with the European tax system (lived there for 24 years before moving to the States) and I don't like it. But to suggest that California/Democrats are in the same boat is plain wrong. At the end of the day, there is a decision to make regarding the balance we strike between economic efficiency (which is mostly negatively affected by taxes) and some form of social justice (which can be positively affected by taxes). Europe has been on one side of it and is slowly moving closer to the US perspective, which I applaud. California and the Democrats are still well clear of the current European position on taxes and government influence (although I am sure you’ll be able to point out one or two "Democratic socialists"….) My personal pick would be somewhere in the Atlantic, 2/3 on the way to the US :)

[Paul J.]

I always become worried when taxes are justified by social justice. Here's a can of worms to not open up in this discussion. :-) I also won't even mention the "rich tax" that is currently being proposed by the politicians and its justifications.

[jeff]

hmmm, rich tax... like the 1% tax that is being levied on the richest of Californians just because "they have more than they need".

Rolf, I was being tongue-in-cheek with my reference to California Democrats (in Sacramento, to be clear) but the comparison is fair when you throw in the "social justice" meme that you just did. I've lived in California all of my life and I can tell you from experience that there isn't a social injustice that liberal Democrats in the state capital don't believe can't be corrected with a new tax or fee. How do you think we got Prop 13 to begin with? The citizen tax revolt that began in the late 1970's was a product of California's tax environment. There is a small band of Republicans in Sacramento that form the last line of defense from a return to that tax, spend, tax more attitude.

And while I'm on a mini rant, what form of social justice is it when governments create economic conditions that lead to stagnation where people can't find jobs, their real incomes shrink year over year, innovation (R&D, patents, etc.) lags the U.S., and an increasingly smaller part of the population is expected to shoulder the economic burden of supporting a growing part of the populuation?

[Paul J.]

Also, don't forget that this small part of the population which is meant to bear the burden of this tax is usually the most savviest at getting around it. Hence, the tax as always harms the middle-class the most.

[jeff]

"nothing is as mobile as a rich man and his money"

- unknown

[Scott Peterson]

It seems to me that these days in the USA most rich individuals are not inheritors of fortunes but are rather people who have become rich through a combination of talent, hard work, and of course some good luck.
I feel that many Democratic voters who favor "social justice" through tax hikes are individuals who want to get something for nothing. They feel that they have a right toa comfortable lifestyle.
Increased standards of living are based on increased productivity in an economy. Increased productivity comes primarily from hard work in the form of research and construction of physical or social structures.

[jeff]

there's still a large amount of inherited wealth, which actually represents an ideological conundrum for me. On one hand I believe it's absolute socialism to have a death tax that serves no purpose other than to redistribute wealth. The conservative in me holds that property rights are absolute, therefore a deceased person should suffer no penalty simply because they wish to pass on their property to heirs. On the other hand, I agree with Thomas Jefferson that inherited wealth represents a black mark on productive society (paraphrasing). Perhaps Jefferson was simply witness to the destructive nature of inherited wealth in Europe and saw this as something that could be corrected in the Americas. Either way, it's something I am conflicted about.