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PRI’s The World: Rich Germans want more taxes

Aired on 12 November 2009. Linked from The World.

Germany’s new conservative ruling coalition is proposing steep tax cuts to help end the economic crisis. That’s sending Germany’s deficit soaring, so a group of very rich citizens says it wants to help bridge the growing fiscal gap. The World’s Gerry Hadden reports.

Wealth for the Common Good co-founder Chuck Collins weighs in on the importance of this movement.


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MARCO WERMAN:  The European Union today warned countries using the Euro they’d better reduce their debt. German officials say the way to do that in their country is through a drastic tax cut, which would stimulate personal spending. In the short term that means the government might have to borrow. And a group of rich Germans wants to help avoid that, as The World’s Gerry Hadden reports.

GERRY HADDEN:  Germany’s conservative Chancellor, Angela Merkel, led Germany over the last five years in what was called the Grand Coalition. That was a euphemism for being forced to govern with the left. And it meant that Merkel couldn’t cut taxes, as she wanted to. Now she can.

ANGELA MERKEL:  [TRANSLATED TO ENGLISH] The new government keeps to their word, that becomes clear in their coalition agreement. We’ll focus on growth and tax relief. We are deeply convinced that this is the premise for work paying off and also to create an incentive. But also the promise for coping with the extraordinary situation the new coalition finds itself in. To get out of the financial crisis stronger than before.

GERRY HADDEN:  Merkel formed a new coalition last month with the like-minded Free Democrats. Together they’re proposing to slash income tax by about 36 billion dollars a year beginning in 2011. The hope is to spur spending and growth. But Germany’s budget deficit is already predicted to be over six percent next year. That’s twice the allowable amount under European Union rules. So, Germany’s mega-rich. Its moguls and barons, its scions of family fortunes, say they want to bridge the gap. Their solution, that Merkel raise their taxes, not cut them. The group’s leader is Dieter Lehmkuhl.


GERRY HADDEN:  Lehmkuhl explains how the plan would work. For the next two years any individual income exceeding 750 thousand dollars a year would be hit with an additional five percent tax. So someone earning a million dollars would end up paying an extra 50 thousand. Lehmkuhl says if the tax were implemented it would generate about 150 billion dollars a year, but it would come with strings. The group wants the money earmarked to improve healthcare and social programs, programs that could face cuts due to the crisis.


GERRY HADDEN:  When we tax the rich and narrow the gap between rich and poor, he says, we have the chance for a fairer, freer and more democratic development. And that should be beneficial to everyone including the rich. Ordinary Germans, like art therapist Agnes Zander, like the idea. She says the rich may want to pay more to assuage a certain amount of guilt. But she says that’s just fine.

AGNES ZANDER:  I have to admit my first reaction is disbelief. I think we all still believe that behind a good fortune there are criminal acts and there’s not the kind of generosity you’d expect like this act here. So for me it means hope. Let’s start in Germany and let’s do it all over the world.

GERRY HADDEN:  Actually, efforts are under way in different parts of the world. In France, England, and the U.S. Chuck Collins lives in Boston. He was the heir to a large meat packing fortune. He helped start Wealth for the Common Good. It’s an organization that also lobbies for higher taxes on the wealthy.

CHUCK COLLINS:  We celebrate the roll of individual effort, and creativity in wealth creation. But we also see how critical it is that we live in societies that make public invests in education and healthcare and infrastructure that help create the fertile ground for wealth creation. And without those public investments, which are paid for by our tax dollars, we wouldn’t be able to create the kind of wealth and business opportunities that we have.

GERRY HADDEN:  Collins says Wealth for the Common Good has had what it considers modest successes. For example, helping to maintain the federal inheritance tax. The group is currently fighting for congress to let some 800 billion dollars in Bush era tax deductions expire next year. The United States has more millionaires than any other country, an estimated two million of them. Next is Germany with nearly 800 thousand. But Dieter Lehmkuhl’s organization is still small potatoes compared to Collins’ group. It’s drawing a lot of media attention these days, but it’s only collected about 50 signatures for its tax increase proposal. For The World I’m Gerry Hadden