Entrepreneurs, politicians and analysts fear the possible victory of the three left-wing parties in the parliamentary elections. According to them, the new taxes will hit Germany’s competitiveness, writes Auron Dodi.
Recent polls suggest a real possibility that the next German government will consist of a three-party coalition of the left-wing political spectrum: the Social Democrats (SPD), the Greens and the Left Party.
In the face of this fact, mainly political competitors, but also representatives of the economy warn of the consequences this could have for Germany.
Bavarian CSU chairman Markus Söder recently said that “the tax increases planned by the SPD and the Left… will damage the economy… and nullify any entrepreneurial commitment.” While the chairman of the CDU, Armin Laschet said that he would fight with all means so that this country “is not taken by ideologues”. FDP Liberal leader Christian Lindner recalls that both the Social Democrats and the Greens “want to increase the tax burden in the highest tax country, Germany.” Both (parties) advocate further collectivization of finance in Europe. Scholzi even wants to impose a new tax, for the EU, and reinsurance for unemployment insurance. “As a result, workers in Germany would pay for the consequences of wrong economic policies elsewhere.”
Representatives of medium-sized German companies have also expressed similar views. Representatives of the economy call this the “worst case scenario” for their businesses.
Most of these enterprises in Germany are family owned. They provide 60 percent of social security jobs in Germany. Therefore their weight in the economy and in the vote is significant.
Fear factors for a left-wing policy shift
Like the Social Democrats, like the Greens, even more strongly the Left party, some of the parties have the pacifist and radical left wing. This spectrum has certain requirements, which are reflected, at the moment, in the election programs. How many of these requirements will be implemented in the program of the next government and further in reality, this is unknown. But usually left-wing parties are more open to state intervention in the economy.
A stronger regulatory environment, a redistribution of income from the richest to the poorest, usually linked to left-wing party policies is understood not to inspire entrepreneurs. As a result of such policies they also fear that the competitiveness of the German economy will decline.
The German economic newspaper Handelsblatt was told by various entrepreneurs that they feared that with the coming to power of left-wing parties, a series of problems would be created or aggravated in Germany. First they fear for freedom as entrepreneurs. “With a red-green-red coalition (SPD-Green-Left) the state will intervene inefficiently in the market and curb all innovation,” a successful young entrepreneur told the newspaper.
The second fear is concrete, are taxes on enterprises (and high-income individuals).
Both the Social Democrats and the Greens, and even more so the Left Party, are in favor of reintroducing a wealth tax. With the exception of the Social Democrats, the Green and Left wealth tax would be applied even if the ventures were not profitable. This means that in such a case, the enterprises had to pay the tax from their private property, from their substance: even by firing people. “In the next crisis, this would put too many ventures at risk for their very existence,” some entrepreneurs told Handelsblatt.
Both conservative politicians and entrepreneurs speak of a step towards the expropriation of enterprises, as this tax hits owners and their rights.
The Left and the Social Democrats are calling for an increase in the inheritance tax in their election programs. This is seen as unfair and another blow by medium-sized enterprises.
Third, ventures fear extreme regulation of the economy, with the intervention of left-wing parties. The Greens program e.g. emphasizes trust in the state. Many medium-sized enterprises fear that if they enter the Green government, energy prices will rise sharply and bureaucracy will increase. The Greens have said they want to ban the use of vehicles with combustion engines. “This would put an end to a technology that is still needed around the world and that with synthetic fuels would be a climate-neutral option,” said Lindner of the FDP Liberals.
The competitive power of the German economy is partly influenced by politics
Even well-known research centers, such as the Paris-based Montaigne Institute, note that a new tax system could reduce the competitiveness of the German economy as a whole.
The new taxes announced by the SPD, the Greens and the Left, according to observers, reduce the capital of family businesses. This also reduces the “creditworthiness of corporate loans.” This would gradually lead to a loss of confidence in the power of German enterprises.
Other analysts see an exaggerated and rather psychological fear that accompanies a possible coming to power in Germany of a coalition of left-wing parties.
Even for this group of analysts there is no doubt that the tax proposals of the left parties aim at a wider redistribution.
At a time when taxes on middle- and lower-income people want to cut all the parties, the Social Democrats and other left-wing parties, for the rich, want to raise taxes.
But they recall that the German economy has long shifted some of its production capacity abroad, even to Central Europe. Further, there are large investments in scientific research, especially in recent years, with which Germany feeds its innovative power. It is this innovative force that supplies German exports.
The economy is currently one of the main topics of concern for Germans, according to opinion polls. This comes at a time when Germany does not have major economic problems. It remains to be seen after the September 26 election whether the rise of the economy to the Germans’ main preoccupation is a projection of fear of a change of political direction in Germany, or whether there is a real basis./DW/
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