“We don't need billionaires in Germany”?

Also in the United States, propaganda against the rich by politicians like Bernie Sanders is taking on increasingly strident forms. Sanders demands that “there be no billionaires” in the United States. Left-wing Dietmar Bartsch also says: “We don't need billionaires in Germany.” Countries without billionaires include Cuba, North Korea and some particularly poor African states (if someone is very rich there, they are just corrupt politicians). By contrast, since the abolition of inheritance, gift and estate taxes, there are 60 percent more billionaires in Sweden than in the United States (relative to population).

The claim that “the rich” pay little or no taxes in Germany is absurd: in Germany, the 50 percent of those subject to income tax pay only 6.1 percent of taxes. On the other hand, the top 1 percent of earners pay 22.8 percent of income taxes. In the United States, described by anti-capitalists as the supposed paradise of the rich, the situation is even more extreme: 50 percent of people who earn $46,500 or less a year pay only 2.3 percent of the income tax. income in the United States. In contrast, the richest 1 percent earning $682,500 or more pay 45.8 percent of the U.S. income tax. The proportion paid by the richest has increased enormously in the last two decades: in 2001, the top 1% of earners in the United States paid only a third of the income tax; 20 years later, it was almost half!

Fake news with wrong numbers

Despite these figures, it is often claimed that the rich are not paying their “fair share.” A few years ago, the figure hit the media that the 25 richest Americans paid only 3.4 percent in taxes. This number went around the world and has been repeated ever since. But the “calculation” that led to this figure made no sense because it was based on a comparison of the taxes paid by the 25 richest Americans each year with the growth in their wealth estimated by Forbes magazine during the same period.

The message was: The tax system is so “unfair” that the rich barely pay taxes and different laws apply to the rich than to other people. Is it really like that? The fact is that the average tax rate paid by the top 1 percent of earners in the United States is nearly eight times higher than the average tax rate paid by the bottom half of earners!

The increase in wealth estimated by “Forbes” occurs among the super-rich mainly because the value of their shares increases. In the case of Jeff Bezos, for example, they come from an increase in the share price of Amazon or, in the case of Warren Buffett, from an increase in the share price of his company Berkshire Hathaway. The claim that the super-rich hardly pay taxes comes from the fact that the increase in wealth, which is mainly due to (unrealized) exchange rate gains, is compared to income taxes, which are based on income or actual profits. It would be like me comparing the increase in the value of your house in the last year with the income tax you paid: an obviously meaningless calculation.

The victims of anti-rich sentiment were ordinary, low-income people.

The example of Chile has shown how much damage such propaganda can cause to the rich, as Axel Kaiser and I now show in an article for the specialized magazine “Economic Affairs”.

In the end, the victims of anti-rich sentiment in Chile were not primarily the rich, but rather people with normal and low incomes. However, the socialists' calculations paid off, as they blamed the rich for the worst economic situation and ultimately won the elections.

A society that is no longer interested in how to increase productivity and generate growth, but only in how to take more and more from the “rich,” will ultimately become not more “social,” but more antisocial, because the entire economy It's damaged.

The absurdity is that the same people who constantly prevent effective measures to limit migration into social systems complain loudly about the increasing number of poor people. 62 percent of the beneficiaries of the citizen benefit are currently of immigrant origin. More and more poor people are allowed to enter the country, and when the proportion of those who are really or supposedly poor increases, they blame capitalism and the rich.

Rainer Zitelmann is a historian and sociologist. His new book will be out next month.
A capitalist's world tour.