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?
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"...
ReplyDeleteI think I can tell you why they needed (or thought they needed) additional taxes. You might wanna read my answer there:
ReplyDeletehttp://retronomics.wordpress.com/2009/12/01/on-the-german-reunification/
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 ....one.
ReplyDeleteThere is nothing so permanent as a temporary tax.
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.
ReplyDeleteDon`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.