Sunday, April 14, 2013

Germans propose tax on property and assets in bailout countries

Wealth tax to pay for EU bail-outs

German economists argue that people in many southern countries are actually wealthier than their German counterparts with a recent study by the European Central Bank showing that the people in bailed-out countries are often better-off than those in Germany where less than half of Germans own their own home, lower than the rate in many southern eurozone members. The ECB study also found that the “median” wealth in Cyprus is €267,000 (£227,600), Spain €183,000, Italy €102,000, Greece €102,000 and €75,000 for Portugal compared to just €51,000 in Germany.

Posted by enuii @ 11:00 PM (2671 views)
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12 thoughts on “Germans propose tax on property and assets in bailout countries

  • stillthinking says:

    Hmm. This is a false measurement of wealth from fictional asset prices. So in order to hold financial assets up, such as mortgages in Spain, additional money is required, however, this seems to be an attempt to hold the value of financial assets up by taxing those holding them.

    Even though the whole problem is that they don’t have enough money… A bit circular.

    You could apply the same valuations to the UK. We are so rich in housing stock nobody has to work, ever again! Except people have less and less disposable income, the savings are losing value hand over fist.

    Also, taxing properties and assets does not increase the productive capacity of the country.. there is no magic. If you had a village with an orchard and they produced 20 tonnes of apples per year, you won’t increase tonnage by property taxes on their little hamlets. All you can do is take the apples they are/were eating themselves.

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  • righttoleech says:

    False thinking indeed – Osbourne’s DNA

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  • This is something that house buyers in Britain need to be aware of. Prices get artificially pushed up. More are forced to rent. Owner/Occupation rate falls – until, eventually, it becomes politically more viable to apply a tax raid on ‘property’ assets to dig the public finances out of a growing hole. Just a thought.

    BTW as I write this

    Gold 1451.4 (spot) down 3.33%

    Silver 24.485 (spot) down 7.01%

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  • Yes the valuation of the asset values may be overestimated, but vast portions of southern europe are owned outright by the uber rich who use it as their playground, and recently money laundering base. Widespread property taxes (in place of income taxes) would raise large amounts of tax income from those who really can afford it and who generally are able to avoid income taxes. This would allow the burden to be lifted of the majority of the populus in these areas allowing growth. Ideally this should happen with stepping away from the eu and devaluation but thats a different story.

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  • ….and still falling.

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  • mark wadsworth says:

    Tough call.

    It’s funny that the Germans are only calling for this in Other People’s Countries.

    While Germany itself is not openly Home-Owner-Ist (they are refreshingly non-NIMBY), it is very Landlordist (rents are low but subsidies to landlords are enormous), and I don’t see them calling for higher land taxes in their own country.

    Their council tax equivalent is only half as high as in the UK and they don’t even have Business Rates (they have Local Income Tax on trades but not “professionals”).

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  • mark wadsworth says:

    ST: “If you had a village with an orchard and they produced 20 tonnes of apples per year, you won’t increase tonnage by property taxes on their little hamlets. All you can do is take the apples they are/were eating themselves.”

    If you stop taxing apple production via income tax and charge a flat rate LVT on land, then of course apple production will go up, there’s no disincentive not to work and there’s an incentive not to have half the houses as holiday homes and half the fields as gloriously large back gardens for Jocasta’s pony.

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  • Intersting, subsidies for landlords in Germany? Isn’t it negative LVT? So how come houses are (supposedly, I did not check) cheap there? Does not the whole situation undermine LVT theory, that no LVT implies land speculation and rent value being taxed anyway, but by private monopolies of landlords?

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  • mark wadsworth says:

    Piotr, houses are not cheap there!!

    The myth that German houses are cheap is because they have had no real price inflation in housing for the past twenty or thirty years, but that in turn is only because their houses were eye-wateringly expensive twenty or thirty years ago and the UK has been playing catch-up ever since.

    And the other side of this is that German politicians go to a lot of trouble to keep rents actually payable by tenants affordable (with rent caps, rent subsidies or simply allowing as much new construction as is needed). Rather bizarrely to UK readers, German politicians see high rents and housing shortages as A Bad Thing. Weird, eh?

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  • OK, if they are expensive, I am not moving to Frankfurt then. Why is subsidizing rents NOT causing rent increase by exactly the amount being subsidized then?

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  • Perhaps, its a slight fear of their people. They become a bit of a collective when angry and do things well in unison such as marching!

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  • orcusmaximus says:

    tom101 @10 – that comment has no place outside of the Daily Mail.

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