Guest commentary by Gabor Steingart - Habeck's austerity attack exposes the Greens as a populist Saint Martin

FOCUS online Guest commentary by Gabor Steingart - Habeck's austerity attack exposes the Greens as a populist Saint Martin Guest author Gabor Steingart (Berlin) • 1 hour • 3 minutes reading time Robert Habeck and the cash cow: It's not that simple in reality. Dismissing Habeck's austerity attack on shareholders as nonsense is too simplistic. There are five real-political arguments that are important for the debate. Then it becomes clear: The Green candidate for chancellor is a left-wing populist Saint Martin. Friedrich Merz called Robert Habeck's suggestion that shareholders should pay social security contributions "nonsense". That is just below the threshold of an argument. That only convinces the convinced. Habeck didn't let it slip. In his new book ("... it's not the case that the state has exhausted all revenue opportunities...") he consciously plays on the feeling shared by many people that the wealthy are favored by the state and employees are disadvantaged. Behind this is the popular idea that there is a mysterious redistribution from the bottom to the top. This debate needs to be put on a real political footing from its ideological head. Here are the five arguments that Merz has avoided but which are important for the response. #1 Rich people pay a lot In Germany, the highest-income taxpayers contribute disproportionately to tax revenue. Looking specifically at income tax, the Finance Ministry's figures for 2024 show that the richest tenth of the population pays around 57 percent of total income tax revenue. The top one percent pay just under 24 percent. All high earners are taxed again as soon as they become shareholders. Only after deducting income tax (42 percent from an income of 66,000 euros and 45 percent from an income of over 278,000 euros for single people) can the net income (or parts of it) be invested in the stock market. All profits above 1,000 euros, even if they are already made from taxed income, are subject to a flat-rate capital gains tax of 25 percent of the profit. So if you earn a million on the stock market, you pay 250,000 euros. So that the shareholder doesn't forget, the bank automatically transfers the money to the tax office. If these funds, which have already been taxed twice, are now used to buy a house, the property transfer tax must also be paid. This means that the high earner has to visit the state treasury several times to pay his dues. He is not spared, he is milked. #2 Low earners are supported In return, more than 20 million people are exempt from income tax because their taxable income is below the basic allowance. This group comprises around 30 percent of the adult population and is made up of low earners, pensioners and trainees. These people are supported by society, either partially or for life. They do not bear the costs that the state incurs for them through its road construction, education, police and army. The same applies to the pension system (100 billion state subsidy) and the health system, where their contributions do not cover the costs of care and medical treatment and have to be subsidized with 14.5 billion from the tax coffers. #3 Shareholders have to pay twice Capital owners could certainly be taxed more heavily, but not on the grounds that they have hardly been taxed so far. The opposite is true: they are taxed more harshly. Capital gains in Germany must generally be taxed twice, once in the company and once in the shareholder's hands. Corporate tax in the company is around 30 percent of the profit generated. This amount is paid directly by the CFO to the tax office. Dividends are paid from what is left over, which are then reduced by 25 percent withholding tax. This means that earned income is not disadvantaged compared to capital gains. There is no gap in justice here. #4 Equity culture cannot develop like this The current discussion is not good for equity culture in Germany. Shareholders and those who want to become shareholders are getting the impression that they are the state's reserve fund. This impression is counterproductive for all efforts to encourage more people to make private pensions. The shareholder ratio in Germany (under 20 percent) is already low compared to countries such as France, Switzerland and the USA. The dividend is not just the company's profit distributed, but also the shareholder's risk premium, which compensates them for years of losses. Because when there is a loss, for example in the event of a stock market crash, the investor is often left alone. Profits from one year can only be offset to a limited extent against losses from another year. #5 The system breakdown and its consequences Health insurance contributions on share profits are not taxes, but rather establish the right to health services. This would mean that all shareholders would automatically be members of the statutory health insurance scheme and private health insurance would be de facto dead. In addition, those with private insurance, with their significantly higher contributions, represent an important pillar in the financing of the German health system. Therefore, after the liquidation of private insurance (which is not permitted under the constitution), health insurance contributions for everyone had to be increased or health services for everyone had to be cut. Habeck's socially intended proposal is thus turned into something antisocial. Conclusion: There is populism from the right and from the left. Robert Habeck appears in the election campaign as Saint Martin. The only difference to the historical model: Saint Martin shared his own coat.