German Election

SPD Wants To Hit Rich Where It Hurts

Peer Steinbrück (left) and SPD party boss Sigmar Gabriel at a joint press conference in Berlin: a "drift in the distribution of wealth"
DPA

Peer Steinbrück (left) and SPD party boss Sigmar Gabriel at a joint press conference in Berlin: a "drift in the distribution of wealth"

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He's not François Hollande, but one could be forgiven for believing he has taken his cue from the Socialist French president. On Monday, Peer Steinbrück, the chancellor candidate for the center-left Social Democratic Party, said he wants to significantly increase taxes for Germany's top earners if elected in September.

It's not nearly as dramatic as the 75 percent wealth tax called for by Hollande in his campaign, but at the core of the proposal is also the idea that the rich should be asked to contribute more to society.

If elected, the SPD candidate says his party will increase the highest tax rate from 42 to 49 percent for any single person earning €100,000 ($130,120) or more a year and any married couple earning in excess of €200,000.

'Out of Sync'

When Hollande tried to reach into the pockets of his country's wealthiest, he came under massive criticism. But Steinbrück sought to defend himself against potential detractors by stating that the tax increase had become a societal necessity. Many things have been "thrown out of sync" in Germany's social market economy, he said. He described a "drift in the distribution of wealth" between the country's poor and rich and "disastrous" financing of German municipalities, which are partly funded through federal taxes.

Seeking to play down fears that a wealth tax might make Germany a less attractive place to do business, Steinbrück said the levy would not be applied to companies. "We need a very strong Mittelstand," he said, referring to the often obscure small- and medium-sized businesses that form the backbone of the German economy -- think printing presses, high-pressure sidewalk cleaners or cement pumps used in the construction of new skylines in China.

Fully aware that the divisive issue could be used against him by his political competitors, the chancellor candidate also took pains to say that "cold, naked Socialism" wasn't creeping its way back into Germany.

Veering to the Left

Nonetheless, it clearly shows that the SPD wants to position itself to the left heading into this year's election. This may not seem out of place given the SPD's historical alignment with labor unions and the left. But many German commentators are noting with irony that the platforms are coming during the week that marks the 10th anniversary of former SPD Chancellor Gerhard Schröder's Agenda 2010 reforms to Germany's cradle-to-grave social welfare system. The reforms were deeply painful for many long-term jobless but are also attributed with helping transform the German economy from being the "sick man of Europe" into the powerhouse it is today.

Steinbrück's speech included the word "fairer," or at least a variation of it, some 150 times. And when asked if the party was veering to the left, he asked, why shouldn't it? The country as a whole has "shifted a little to the left."

The platform also includes the introduction of an €8.50 minimum wage (which is lacking in many sectors of the labor market), allocating more money for education and calls for a general taming of financial capitalism. "It's about keeping this house together," he said, referring to German society as a whole.

SPIEGEL ONLINE describes the platform as "class war lite," noting that there has been little criticism of Steinbrück's speech in Berlin, which has also seen Merkel's conservative Christian Democrats and the business-friendly Free Democratic Party adopt a new affinity for the idea of "solidarity" in recent months. "That the focus on social justice is no longer exclusively the domain of stubborn former communists is evidenced by the fact that the Christian Democrats and FDP have suddenly discovered their love for the idea of (social) solidarity in their own party platforms," the SPIEGEL ONLINE analysis of Steinbrück's platform notes.

With the CDU and FDP moving ever closer to the center, the SPD seems left with little choice but to inch to the left. The final platform is expected to be agreed upon at a party event on April 14.



© SPIEGEL ONLINE 2013
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