After more than two years of the Covid-19 pandemic, Russia’s war against Ukraine is now also weighing on our economy. The resulting price increases are felt by millions of people. More and more citizens with low incomes or low pensions no longer know how to make ends meet. It is also worrying that the middle class is reaching its limits. Families with children in particular face the risk of energy costs increasing many times over. What is taken for granted can become a luxury for large parts of the population.
The traffic light under Chancellor Olaf Scholz started as a progressive coalition. After the CDU/CSU had put the brakes on for years, our aim was and is to now prepare Germany for the future with speed. The SPD, Greens and FDP have already achieved a lot in a short time: With the energy package we are finally laying the foundation for a massive expansion of renewable energies and the minimum wage will help millions of employees.
The citizens’ allowance recently passed by the cabinet will come into force on January 1st, and a major housing allowance reform is coming. For all of this, it may be necessary to suspend the debt brake for 2023, which is justified by the exceptional geopolitical situation.
Ahead of us lies a social change that we want to actively shape together with our coalition partners. Of course, three parties bring different perspectives. This enriches the discussion about our joint future project. If we want to make our economy climate-neutral and ensure the prosperity of this country, then we need large public investments in the potential of future markets and technologies, in training and further education, in regional structural developments and in a sustainable and affordable infrastructure.
From the point of view of the parliamentary left in the SPD parliamentary group, a high level of public investment also has a steering effect on private sector investments and thus provides important growth impulses in the medium and long term. Our country is facing a major effort in this crisis. This crisis does not only affect people who have little. It also endangers large sections of the middle class. Targeted help is needed for the majority of the people in this country.
We are convinced of this: We must improve public revenues so that the state remains able to act. In this way, we can initiate further relief for the citizens and provide impetus for growth. In the past few weeks, we as the Parliamentary Left in the SPD parliamentary group have discussed ways out of this unprecedented crisis and want to put our positions up for public discussion.
In essence, it is a one-off levy on particularly large assets. Because one thing is clear: the projects of digitization, a labor market of the future and a sustainable infrastructure cannot be managed out of a recession. If we don’t tackle these challenges now, we will endanger our country’s prosperity in the medium term.
A personal allowance of two million euros ensures that the tax burden is concentrated on the particularly wealthy sections of the population. For investments in corporations and business assets, the exemption could be increased to five million euros. Higher assets are correspondingly subject to a progressive tax rate. The levy would only affect the wealthiest 0.4 to 0.5 percent of the population and could still generate a low to mid three-digit billion amount of total revenue, depending on how the levy tariff is set.
This idea is not new. With the very similar concept of burden sharing, Konrad Adenauer created an instrument that made a major contribution to the economic miracle in the early stages of the Federal Republic. Our proposal provides for business assets to be protected in such a way that medium-sized companies are not additionally burdened in these difficult times.
In our view, the key date for determining assets must be in the past in order to rule out incentives to reduce assets and avoid tax evasion. In order to keep the burden on assets reasonable, the payment of the wealth levy over a period of up to 20 years is conceivable. In contrast to a tax, the wealth levy is levied once and paid off over a period of time.
The levy we are imagining will only be a burden on those whose assets have grown almost unparalleled in global comparison in recent years and despite all the crises. Because the wealth inequality in Germany is shamefully high in international comparison – and it is also growing faster than in other countries. It is therefore also a question of social justice and the cohesion of our society, to which a wealth levy can make a contribution. Strong shoulders can carry more. Let’s make sure they do too.