GERMANY: Calls to tax rich more as polls loom

GERMANY: Calls to tax rich more as polls loom

LONDON - Greater "social justice" and higher taxes on the wealthy are at the core of the left-leaning electoral campaign of Germany's opposition Social Democrats, who hope to unseat Chancellor Angela Merkel in September elections.

The socialists' agenda, unveiled this week by Mr Peer Steinbrueck, the party's candidate for the chancellorship, calls for a top income tax rate of 49 per cent.

They are also demanding the reintroduction of a property tax abolished by the German government in 2009, and which is estimated to hit the country's top 10 per cent of revenue earners.

Dr Merkel rejects all these policies as "extreme", claiming that, far from touching the super-wealthy, they are only likely to hit the often family-run small and medium-sized businesses which are the foundation of Germany's economic success.

She has pledged to avoid any new property taxes and keep the top tax rate at 42 per cent.

All the indications are that Dr Merkel remains popular with the electorate.

Opinion polls predict that her centre-right party will win at least 40 per cent of the ballot against little more than 25 per cent for the socialists.

But the vagaries of Germany's complicated electoral system and the weakness of Dr Merkel's traditional political partners mean that she may have to form the next government with the socialists' support, and they are certain to insist on higher taxes on the wealthy as their price for forming a coalition.

jonathan.eyal@gmail.com

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