Armstrong Economics Blog/Germany
Re-Posted Apr 19, 2018 by Martin Armstrong
The SPD in Germany is a left-wing socialist party that still believes in exploiting the rich in true Marxist fashion. Now that the SPD gained power in a coalition with Merkel, the German economy is in perfect alignment with our Economic Confidence Model pointjng down into 2020. The SPD leadership has made it very clear that they will raise taxes on the rich out of fairness as they see it for everyone should have the same net income at the end of the day. They call this “fairer financing of state tasks and a correction of social inequalities.”
The SPD will now push its tax policy ahead to the detriment of Germany and Europe as a whole. Despite all the historical evidence that raising taxes reduces jobs and economic benefits for the people, they just cannot escape the idea that someone has more than they do and to hell with the studies. They will also go after not just high incomes, but are looking at asset taxes and of course their most hated practice of all – leaving something for your children. They intend to raise inheritance taxes to fund state tasks which is really a code word for state pensions.
So far, the SPD has not publicly stated which citizens are the rich. This has always been a huge problem. Even in the USA, the definition of the rich started at $5 million and has moved down to $250,000, and then it has moved down to a household income of $250,000. The easy way to raise taxes is to constantly redefine who are the rich by lowering that definition and then apply it to household income. The day most likely will come when it is applied to children earning income while still living at home. The hard internal struggle to create a new the grand coalition with the CDU will have a devastating impact economically upon Germany. The SPD now finally gets control to impose their socialist agenda.