Germany, What middle class?
Unlike the American conservatives, German conservatives love taxes. As luck would have it, guess who’s in charge of Germany at the moment - the conservatives. And not only do they love taxes, but they seem intent on eliminating what’s left of a middle class here in Germany. Have a look at this Wikipedia entry that shows how the tax brackets have changed in the last 30 years:
http://de.wikipedia.org/wiki/Einkommensteuer_(Deutschland) Whereas in 1975 the top tax bracket started at EUR 66,000 (converted from 130,000 German Mark) and taxed people at 56%, today the top tax bracket starts at EUR 52,152 and taxes people at 42%. And let me tell you, 66000 Euro was a lot more back then than it is now! Germany thinks it’s making real progression in the tax scale area: starting in 2007, it implemented a “rich people” tax that taxes income above EUR 250,000 per year at 45%. A whopping 3% more than the highest tax bracket. By way of comparison, have a look at the US tax brackets for 2007. There, the tax bracket just under the “rich people” bracket doesn’t start until about EUR 125,000.
I couldn’t figure out when we came to Germany why the supermarkets all compete on price and not on quality, atmosphere, or selection. But I’m beginning to form a theory that there is just not a significant middle class out there that is willing “en mass” to spend that additional amount for better selection or quality. And there’s no reason for that middle class to be ambitious about their salary either: a raise will probably just put them into a tax bracket 5-10% higher than the one they’re already in; it’s more advantageous to stay in a lower bracket and get tax cuts and subsidies.
The German economy is facing dropping consumption, and the government has promised .. that it will not lower taxes. Ever. Can you believe it? Of course, the people making the laws are all well above middle class - they’ve got no reason to change anything, they’re getting a break. I guess what I’m driving at is: there should be higher taxes in the top brackets, and the current top bracket here in Germany should be split up.