Tuesday, June 28, 2005

Germany's ruling party proposes wealth tax

Germany's ruling Social Democrats (SPD) have called for a "wealth" tax that would impose a 3 per cent additional tax on annual incomes over €250,000 (US$302,466) or married couples who earn more than €500,000 (US$604,826).

Bert Rur√ľup, a leading German economist said, "It's purely symbolic politics without economic sense and a very modest fiscal effect."

If the measure is introduced, it would be interesting to see if it would prove counter productive, with those on the "rich list leaving Germany or moving assets off shore.

This idea is not new, but invariably the populist perception of the benefit outweighs the reality.