These days, all the talk is again about tax reductions. I would not object, although I have no idea how that is supposed to be possible.
I just do not have enough creative imagination to envisage tax reductions in a country where the new debt for 2010 is already estimated at 100 billion Euros, with an estimated extra failure of incoming taxes to the tune of another 300 billion Euros and expenses that will certainly not decrease.
When tax reductions are talked about, mention is always made of a new (anti) phrase:
After the “cold war”, it has now been discovered that there is a “cold progression” under way – which we want to do away with.
“Cold progression”, however, is something that existed as early as the year I was born (1950). The tax system of the Federal Republic of Germany after the war was not so bad. The only factor they forgot was that inflation was inevitable and therefore the progression should have been adjusted to the inflation rate. That would have made the tax reform unnecessary.
Unfortunately, the Federal Ministers of Finance did not simply increase the progression limits. Instead, they thought that the word “tax” (in German: Steuer) has something to do with “control” (in German: Steuern). Tax reductions were used for controlling economical targets. Consequently, the tax legislation got more and more complicated. Over time, tax subsidies generated undesirable structures, or else they achieved the opposite of what they were meant to achieve.
And now we are confronted with our tax monster, with no chance of getting rid of it. Whenever you want to hack off one head, two more grow to replace it. And I bet that Merkel&Westerwelle, too, are not eager to face this monster.
All according to the motto: “We would certainly be willing to do something, but where to get the courage?”
RMD
(translated by EG)
P.S.
To give you an idea of the numbers involved: the 100 billion Euros of new debt alone are 7.5 times the yearly turnout of Microsoft and 20 times that of Amazon (as of last year).
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