Friday, 2 September 2011

Wealthy tax payers in Germany and USA ask to pay more taxes to help their countries face the financial crisis

Robin Hood Memorial
Reading some articles on this issue immediately remind to me the legend of Robin Hood, the famous English character who stole from the rich to give to the poor. However, there are a number of reasons behind the choice of some tax payers to request to pay more taxes and reform the current tax systems in Western countries.

  • Unfair re-distribution of wealth 

According to a 2006 study from the Federal Reserve System, in the United States,at the end of 2001, 10% of the population owned 71% of the wealth and the top 1% owned 38%. On the other hand, the bottom 40% owned less than 1% of the nation's wealth. Furthermore, the distribution in the United States had been changing with indications there was a greater concentration of wealth held by the top 10% and top 1% of the population. In Germany, "hardly anywhere else in the world has the number of millionaires increased as much as in this country," said Mr. Dieter Lehmkuhl pointed out, while the incomes of most Germans had stagnated or even decreased. Lehmkuhl warned and urged the government to reinstate the property tax that had been abolished 12 years ago.
  • Impact and effectiveness of public spending
In many countries public resources are diverted from investments for collective purposes for lobbying and political interests usually in proximity of administrative and presidential polls. The situation is worsening also in conjunction with the heavy cut spending decided in various jurisdictions to face the global financial crisis.
For this reason, the initiative launched  in Germany by the  “Vermoegende für eine Vermoegensabgabe” (Wealthy people in favor of a wealth tax) demands that the new gains should be spent for specific projects in the areas of environmental protection, education and social services like health care and social welfare rather than be simply added to the general  budget.
  • Fighting tax evasion
The mission of the Organisation for Economic Co-operation and Development (OECD) is to promote policies that will improve the economic and social well-being of people around the world. The fight to  tax  avoidance and tax evasion, which threaten government revenues, is one of the main issues of concern for the organization. The OECD promotes the Tax Information Exchange Agreements among countries to prevent evasion in foreign tax havens. The US Senate estimates revenue losses from tax evasion by U.S.-based firms and individuals at around 100 billion dollars a year. In many other countries, the sums run into billions of euros. This means fewer resources for infrastructure and services such as education and health, lowering standards of living in both developed and developing economies.

In the USA, Warren Buffet in the days of downgrading U.S., had proposed more taxes for the super riches, In Spain, if the socialist candidate Alfredo Pérez Rubalcaba will win the November election, he could reintroduce a tax on assets for three years. So as to give new life to the Iberian banks.

To read more
Tax justice network
How I learned to avoid the taxman in the British Virgin Islands
Wikipedia - Distribution of wealth
Watch Warren Buffett say raise my taxes
OECD - Section on Taxation
OECD - Tax treaties

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