Distribution debate: SPD wants to finance welfare state reform with higher taxes for the rich

The SPD speaks of a "new welfare state". Projects such as citizens' money and ground rent would cost a lot. The Social Democrats want to tax the wealth of the rich.

The SPD is considering financing its plans to reorganize the welfare state through higher taxes for the rich. "First, we currently have tax revenues, they are there," said Secretary-General Lars Klingbeil in ZDF "morning magazine". For the preservation of the welfare state, however, one must also "hold the super-rich to account".

Next Klingbeil said: "The wealth tax is a point that we think about as SPD." He observes that "the gap in this country between rich and poor" is diverging. Finance Minister Olaf Scholz had already end of January for an increase in the top tax rate by three points to 45 percent.

At the weekend, the SPD decided on its "welfare state concept 2025" at its retreat. This includes a departure from Hartz IV in favor of a so-called citizen money - so that social welfare recipients would be less strongly sanctioned; older unemployed people would receive up to three years of unemployment benefit I instead of falling into social assistance after 12 or 24 months as they do today. In addition, the minimum wage of currently € 9.19 is to be raised to € 12 and a family working time with family allowance introduced.

Criticism from the opposition

The coalition partner expressed understanding: "It is totally legitimate for the SPD to say that we want to move a bit more to the left because we want to sharpen our profile," said Union faction leader Ralph Brinkhaus in the ZDF "Morgenmagazin".

The opposition, however, criticized the concept - from different perspectives. FDP leader Christian Lindner told the "Handelsblatt": "Instead of distributing new billion-dollar election campaign gifts with the garden hose, the SPD should think about how we can take targeted action against old-age poverty."

The Left considers the proposals of the SPD for insufficient: "Who wants to break away from the agenda policy, the deregulation of the labor market has to declare war," said Group leader Susanne Ferschl the news agency AFP. This meant abolishing non-prudential time limits and agency work, limiting mini and midi jobs and raising the contribution rates in basic security.

Klingbeil: A means test for a basic pension creates only more bureaucracy

Klingbeil defended in the "Morgenmagazin" also the initiative of SPD Labor Minister Hubertus Heil, long-term pension contributors without testing the need to guarantee a basic pension above the Hartz IV level (read an analysis here). Such a means test is "not practicable". Because: The proportion of low-income earners, who would not be eligible, is "so small that it is not justified to build a bureaucratic apparatus that checks over and over again the retirees," he said.

Although the basic pension is provided for in the coalition agreement, it is linked to a means test. Members of the Union had repeatedly criticized the proposal of the SPD in view of the foreseeable billions in the federal budget as too expensive. Instead, it wants to abolish the solidarity surcharge for the richest ten percent of citizens and considers tax cuts to be sensible.

The social-political left-wing pressure of the SPD has sparked a debate over whether the party wants to provoke a break in the Grand Coalition (read a comment here). Klingbeil resisted this suspicion: "We want to govern, but we also want to govern with ideas that are up-to-date," he said. The majority of people are behind the demands of the SPD. He was sure that there would be movement in the Union as well.

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REF: http://www.spiegel.de/wirtschaft/soziales/spd-will-sozialstaatsreform-mit-hoeheren-steuern-fuer-reiche-finanzieren-a-1252632.html