Tuesday, April 4, 2017

Promises From the Linke Party

Last night, there was a two-minute news piece from ARD (Channel One from the public networks here in Germany) over a meeting at the Linke Party.

We are in the midst of a campaign season, and politicians tend to meet....discuss objectives and hype up their agenda for the future, and the vote.  This morning, I went back and did a fair amount of reading over the hyped-up agenda.

So, there's three interesting aspects of the Linke Party objectives.

First, they want the NATO arrangement ended.  Oddly enough, they want a military cooperation arrangement with Russia.  They didn't go into details how this arrangement would work but they obviously felt that it could only be a good thing.

With this NATO thing ended....they also wanted the Germany military budget cut by 30-percent, and all present deployments outside of Germany to end.

You might be able to convince 50-percent of the voters that NATO has outlived its usefulness (even I'd agree to that), but having some military relationship tied direct to Russia?  Well....no, that idea won't sell well to the German public.

Second, they want the welfare plan of Germany (Hartz IV) to be dumped.  This 409 Euro that you'd get individually under the current welfare program?  To be shifted into a non-welfare related program....basically called 'basic pay', and you'd get 1,050 Euro instead.  Why the nice round number?  Well, yeah....that wasn't explained but when you typically throw round numbers out....there's no science or fact to it....it's just a number grabbed out of the air.

Generally, most Germans would agree that the 409 Euro per month, per individual....is a raw deal and barely sustains a guy.  It's supposed to be short-term deal to get you encouraged to continue to seek work and move ahead.  Last year, I was reading a summary of facts on the German welfare program, and they admitted as of 2016....one out of every seven kids....is living in a household that survives off Hartz IV.  Roughly....15-percent of society is now on the program....either for long-term or short-term.

Switching the name to basic pay?  It would momentarily end some of the stigma attached to the whole welfare deal, but in a year.....even basic pay would be deemed as insulting in some fashion..

Third, then we came to the cherry on the cake of the Linke Party.  Taxation.

Their new idea is that if you made over 86,000 Euro (again, a nice round number), a tax rate of 53-percent would fall into place.  You would take home 40,420 Euro.  Oh, but then you'd have to subtract health care, pension tax, etc.....so you'd actually only take home around 35,000....nowhere near the 86,000.

That only starts the process.  There would another tax to fall into place if you made a million a year....instead of 53-percent, it'd be 75-percent.  So a million Euro a year would really only equal 250,000.

Another feature of this taxation would be that you'd have a 5-percent tax on pure wealth if you had more than a million.  So, if you were just a lucky guy on investments and held a portfolio of 2-million Euro....you'd automatically have a tax 100,000 Euro to pay, yearly.

I sat and analyzed this whole gimmick. There are two curious outcomes.

1.  If they were successful in making this occur (say as a coalition partner of the SPD)....then you'd have a ton of money coming into the government.  How would you use that money?  That's not in the talking-papers of the Linke Party.  You could be looking at ten to twenty billion Euro in the government's hand....so how would it be used?

2.  If you were a fairly successful manager or CEO of some company and facing this type of taxation....why would you keep the company headquarters in Germany?  You'd sit and watch at least a hundred German companies suddenly chat about moving the headquarters of the operation into Luxembourg, Austria, or Switzerland.  If you had a significant portfolio of ten million Euro....why stay as a resident in Germany....you'd start to draw up plans to move off to Cyprus or Italy.  Within two years....the government would be asking why so many rich people left, and why so many German corporations maintain their structure in Vienna or Lux City.

Not much of what was said yesterday had anything to do with safety or security, or immigration.  That would be very noticeable about the topics thrown out there.

In some ways, they've more or less ensured that there's no more additional votes to be expected.  As a partner of the SPD in some coalition, if the SPD was to win?  It's going to give heartburn to a lot of people under the SPD flag.

No comments: