Saturday, April 7, 2012

Germany Proposes Generational Tax Scheme to Pay for Retirees




Prime Minister Margaret Thatcher once said, “The problem with socialism is that you eventually run out of other people’s money.” Germany is finding that maxim to be true. They’re trying to find a way to pay for retiring baby boomers pensions and health care. The only ones left to shoulder the burden are the young.


The Sydney Morning Herald reported the following:

GERMANY is proposing to levy extra taxes on the young to pay for the costs of the country's growing numbers of old people, under government plans for a ''demographic reserve'' levy.

Angela Merkel's Christian Democrats have drafted proposals that, if law, would require all those over 25 to pay a proportion of their income to cushion Germany against a looming population crisis.

The German Chancellor's ruling party is seeking extra sources of revenue to pay for soaring pensions and bills for social care costs as Germany's ''baby boomer'' generation ages amid a decline in the birth rate.

The proposals, to be adopted by Dr Merkel's party cabinet after the Easter break, have not yet set a figure on the age tax but officials are considering a special levy of about 1 per cent of income.

Because of a slump in Germany's population, as more ageing Germans retire there are fewer young workers to replace them as taxpayers to fund generous welfare and pension arrangements.

Estimates from Germany's federal employment agency predict that the workforce will be reduced by 7 million people by 2025.

''We have to consider the time after 2030 when the baby boomers of the '50s and '60s are retired and costing us more in health and care costs,'' said Gunter Krings, who drafted the Christian Democrat position paper.

How many times have we heard Barack Obama and his democratic operatives laud the European system? Is generational theft their aspiration? Is their goal to bankrupt American citizens and make us dependent upon the state? To this we shall never give our assent.



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