Soaking the Rich in Berlin

In a desperate bid to maintain power, Gerhard Schroeder, who pandered to leftist anti-Americanism during Germany's last election, now appears ready to destroy the country's economy in order to gain a few more hard left votes.

Chancellor Gerhard Schröder's pledge to impose a punitive wealth tax on Germans earning more than €250,000 (£166,500) a year met howls of protest from economists and opposition parties yesterday as the government prepared for an early general election this autumn.

Chancellor Gerhard Schröder's pledge to impose a punitive wealth tax on Germans earning more than €250,000 (£166,500) a year met howls of protest from economists and opposition parties yesterday as the government prepared for an early general election this autumn.

The controversial plan for an additional 3 per cent tax on the wealthy who now pay 42 per cent income tax, were unveiled by Mr Schröder's ruling Social Democrats at the weekend as part of the party's election manifesto.

The once mighty German economy, formerly the engine of Europe, has been declining rapidly over the past decade as years of leftwing quasi-socialist economic policies have finally caught up with Berlin. Unemployment remains near double-digit levels, innovation has stalled, and competition from Asia is sheering away market share from Germany's traditionally dominant industries, especially luxury automotives. Add to this mass immigration of increasingly extremist Muslims who refuse to assimilate and a demographic decline of native born Germans that threatens to send the entire German welfare state into collapse. And what has Gerhard Schroeder done to address these issues? He's alienated Germany's most powerful ally, the US, in favor of a dalliance with France, a country without military of economic might, and now he plans to drive away Germany's remaining productive talent through brutal taxation.

The new tax would go towards funding education and scientific research. "I believe that the very many people, who are much better off than the average members of our society, are patriots enough to recognise that they also have to do something for the future of our country," Mr Schröder said.

But the proposal was instantly condemned by senior economists and opposition parties. Bert Rürup, one of the government's own economic advisers, said the wealth tax was "pure political symbolism without any economic sense".

Dirk Niebel, the general secretary of Germany's liberal Free Democratic Party described the proposal as "bonkers, times 10" and pointed out that the government had only recently reduced top tax rates for high-income earners. "Now they are planning to do the exact opposite," he said.

Sadly, the German people, despite a front row seat to the bankruptcy of socialist economics, apparently never learn.

But opinion polls suggest two-thirds of the German electorate are in favour of a wealth tax. The measure was the latest attempt by Mr Schröder's ailing Social Democrats to win back leftwing supporters who have been deserting the party in droves in protest at the government's unpopular economic reform programme. Last month, the party was indignantly rebuked by German business leaders for drawing up a list of so-called "locust companies" which were alleged to have moved in on German concerns, sacked workers en masse and engaged in unbridled asset-stripping.

Attacking the wealthy is the tried and true tactic of the left, which never works in practice and only results in worsening economic conditions. Mr. Schroeder's new tax, if implemented, will only drive more talented Germans to seek jobs and fortunes abroad, further weakening the deteriorating German economy. It's economics 101, but Mr. Schroeder has already demonstrated that he cares less for what is in Germany's interest than in keeping his office.