Monday, November 30, 2009

Germany's Reuinification Tax

I received this from a pretty fraulein in Germany, which then piqued my curiosity, triggering this question;

"I have a stupid question.

Did it ever occur to the Germans immediately after reunification that a reunification tax would NOT be necessary as private investment would presumably swoop in and take advantage of the cheap land, labor and capital? Or was "reunification" just used as a excuse to create another tax?"

Any German economists out there have any thoughts?


Elizabeth said...

I can't speak for the entire German population, but as far as my small social circle goes: we believed it was "necessary" only in the sense for certain politians to win elections. Reminds me of Obama's "hope and change"...

Anonymous said...

I think I can tell you why they needed (or thought they needed) additional taxes. You might wanna read my answer there:

Anonymous said...

I'm not German, but I know the ENTIRE legal basis of Canadian income tax rests on a law to allow the goverment to _temporarily_ raise money for World War

There is nothing so permanent as a temporary tax.

Anonymous said...

In high tax countries, the government always try to come up with new tax schemes. The existing taxes are already tapped out. The VAT tax is a perfect example. Once a country limits out on income taxes (another increase will not bring in more revenue) they bring in a national sales tax.
Don`t worry, you will not have to wait very long before seeing this sort of tax madness in America. Higher income taxes, a national sales tax, tax on tax, and it will be all dressed up in nice language.
The new taxes will be either revenue neutral, or temporary.