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New Tax as the Best Debt Brake
by Sahra Wagenknecht
Monday Apr 16th, 2012 4:45 AM
Sahra Wagenknecht is a leader of the Left party, Die Linke, in the German Bundestag and author of "Freedom instead of Capitalism." Learning from other cultures is a strength, not a weakness. The University of British Columbia had a tuition freeze for 6 or 7 years and kept tuition at $2300. Forever Number One is also a black hole of the global economy, a broken cistern that cannot hold water desperate for alternative economics, trust and public spirit.

MILLIONAIRES’ TAX SINCE THE BEST DEBT BRAKE

Job interview with Sahra Wagenknecht

[This interview published 3/19/2012 is translated from the German on the Internet, http://www.linksfraktion.de/interview-der-woche/millionaerssteuer-beste-schuldenbremse/.
Sahra Wagenknecht is a leader of the Left party, Die Linke, in the German Bundestag. A tax on millionaires is the demand of justice, not of envy and can help master the debt crisis.]

Once more the Die Linke party within the Bundestag urges a millionaires’ taxes. Why does Germany require a millionaires’ tax?

Sahra Wagenknecht: Within Germany, 830, 000 millionaires possess assets of 2. two trillion euro. This is a lot more than the German Federal Federal government, territories and local government authorities have in debts. While real wages fell for a long time and social benefits had been cut, the assets from the richest one percent from the population rose even within the crisis. On average, millionaires in Germany might increase their assets eight percent annually since 2003 and billionaires even 10 %. This redistribution from bottom to top should be ended because this submission policy fuels speculation and results in crises which ten load public budgets, not just for reasons of justice.

Opponents of the millionaires’ tax like to talk about an envy tax. Exactly why is a millionaires’ tax simply?

The crass inequality of assets can't be justified by anything. The richest tenth from the German population possesses a minimum of two-thirds of the total assets as the share of the lowest 70 percent as a whole assets has fallen to under ten percent. Here is actually another example: the business head of VW pocketed seventeen. 5 million Euros in 2011 that was almost a thousand times around a subcontracted worker in the same firm. This has nothing related to differences in performance. Rather most millionaires don't have to work for their property. They simply inherit all of them. Die Linke is convinced they ought to at least pay normal taxes. A millionaire shouldn't pay a smaller portion of taxes than their cleaning lady.

The millionaires’ tax can also be up for debate4 internationally due to the banking crisis. The American president Barack Obama demands it combined with the French socialist Francois Hollande. The rich in america should pay at least 30 % in taxes. If Hollande works, the top tax price in France should add up to 70 percent. How high if the millionaires’ tax be within Germany?

Germany ranks in the low end in the actual international comparison in property- as well as inheritance taxation. We wish to change this. In the legislation, up for discussion within the German Bundestag this 7 days, we urge reintroduction from the property tax as the millionaires’ tax – having a tax rate of 5 %. This alone would pour a minimum of 80 billion euro to the public treasury. In addition we urge as much as 75% income tax upon income millionaires earn. The French presidential candidate from the socialists, Francois Hollande, additionally supports such wealth taxes.

Why is a millionaires’ tax much better than a debt brake within times of crisis?

The effects of the crisis have intensely burdened the general public budgets. According to Dinar stat, public debts in Germany catapulted almost another between 2007 and 2010 in order to 2. 1 trillion Pounds. This refers back to begin with to the bailout packages for that banks. The3 money pulverized for that bank bailout should right now be collected through slashes to employees, pensioners and also the unemployed. This is unjust as well as economically harmful. Public budgets can only grow from debts; they cannot save from debts. The spending cuts forced throughout Europe make this impossible given that they strangle the economy and result in more unemployment, poverty as well as an ever greater financial debt burden. We want to reduce the debt burden by calling those to pay for who profited from the actual financial casino and numerous tax gifts and contributed towards the crisis through their carry out.

How should the extra revenue be used?

Using the revenue from the millionaires’ taxes, the domestic market might be strengthened and jobs produced. Social benefits should be raised and also the enormous investment backlog disassembled. State indebtedness can only be reduced once the rich and super-rich spend. The millionaires’ tax is the greatest tax brake.

In 1996 a rise in the property taxes in Germany was last enacted following the German Constitutional Court announced this tax unlawful within 1995. Does the exact same fate threaten a millionaires’ taxes?

The German fundamental law does not stand when it comes to a property tax. The German Constitutional Court declared the way of its increase unlawful since property was favored in the actual tax law. The property tax itself wasn't declared illegal. Nothing will stand when it comes to a property tax whenever this error is remedied.

POLITICIANS AS LOBBYISTS. GET RID OF THE TROUGH! [This article published 3/15.2011 in the Austrian Die Presse is translated from the German on the Internet, http://diepresse.com.]

In their books Jeffrey Sachs and Joseph E. Stiglitz recommend effectively fighting corruption. They urge rules against fraud and international actions against banking secrecy.

In his new work “The Price of Civilization. Economics and Ethics after the Fall” (2011), the economist Jeffrey Sachs identifies “seven necessities for effective governing.” One of the most important is ending “corporatocracy,” the hegemony of mammoth corporations over Washington. The system of election campaign financing, lobbying and the revolving doors between politics and the economy have long not functioned.

The word creation “corporatocracy” used in 2004 by John Perkins in “Confessions of an Economic Hit Man” is negative. It describes the corruption of corporations and politics. Jeffrey Sachs’ following point could also describe the relation of Austrian parties and businesses to the state. Lobby firms must be prohibited from allocating campaign funds since they are a “cancer for the political process.” Therefore persons with high posts in the government should not be able to work for or as lobbyists after leaving government service, recommends the professor who teaches at Columbia University in New York.

THE MOST GRIEVOUS CORRUPTION IN ELECTION CAMPAIGNS

Lobbyist jobs should be prohibited for those politicians and officials who previously were directly occupied with those firms in their service time. “Take away the trough,” Jeffrey Sachs urges. Gigantic corporations see financing elections as investments to bring about tax breaks for the rich, deregulation or government contracts. Direct counter-measures must prevent them from buying politicians through contributions.

In “Making Globalization Work,” (Norton, 2006) the former chief economist of the World Bank, Joseph E. Stiglitz recommends a simple prescription against corruption. It is directed above all against multinationals. “The international community should quickly devise rules against banking secrecy and expand to areas that are not only limited to terrorism. The G8 could leap in the gap by simply prohibiting any of their banks from doing business with those institutes and submitting to other rules than their own.”

In the struggle against terror, the US showed that collective actions work. They efficiently prevented banks financing terror. The same resolution should be applied against corruption, weapons trade, drugs and tax evasion,” Stiglitz says. For him, the loopholes of tax havens are not an accident. The possibility6 of offshore banks exists because it is in the interest of certain groups in highly developed countries. Corruption plays a great role in the election battles of industrial nations. The contributions of big businesses occurred on a greater scale than the bribery of officials. In any case, corruption has a disintegrating effect on the economy and must be stopped both in its supply and in its demand.

SPECULATING MADE EASY

Regulation of Shadow Banks. Shadow Banks are a Great Danger

By Ulrike Herrmann

[This article published in: Die Tagesanzeiger, March 2012 is translated from the German on the Internet.]

The word “shadow banks” is revealing. In great conciseness, it describes a very strange phenomenon. These are banks that officially are not banks and therefore are unregulated and can operate in the shadows on the financial markets. Hedge funds, private equity funds, money-market funds, derivative traders and conduits of all kinds are part of this novel structure.

These shadow banks are extremely dangerous because they all utilize the same trick for maximizing their profit. They “leverage” by taking credits. Thus they speculate with foreign money.

Banks have also long discovered the charm of shadow banks. Normal banks are subject to a very fine-meshed control. Evading this regulation and funcing their own conduits is obvious. These “offshore businesses” proved fatal in the last financial crisis.

It has also dawned on politics that regulating the financial markets is impossible when 30 percent of the sales occur in unregulated shadow banks. Since the last financial crisis, the mantra is “every place, every product and every actor“must be controlled. However nothing has been done and the latest advance of the EU commission may also be unsuccessful. The commission did not expect the British government to allow the financial center London to forfeit its lucrative business with the shadow banks.

There is no EU-wide regulation of the shadow banks. There is only the single-handed effort. Germany could prohibit all German banks from conducting business with shadow banks. The damage may be kept under control. In the past, no one could prove that shadow banks are indispensable. They are only indispensable for the profit model of Deutsche Bank.

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