High taxes – economy

The Financial Times once called him the rock star of economists: Thomas Piketty. The Frenchman has been criticizing inequalities for years and has at times made spectacular proposals in the discussions: according to him, billionaires should give up around 90% of their wealth, income tax should increase considerably for the richest – and in return, all citizens should be 120,000 euros Received from the state at the age of 25 as seed capital to buy real estate or start a business.

The best-selling author presented his analysis and ideas at the Munich Economic Debates organized by the Ifo Institute and the SZ. According to this, inequality is a global phenomenon: “In countries like South Africa or Brazil, the richest ten percent of the population have a share of 50 to almost 70 percent of total national income. “, did he declare. “The poorest 50 percent of the population, on the other hand, has only a single-digit percentage, for example in South Africa.”

In Europe the differences are not that big, but Piketty stressed that he “is not satisfied with that”. Because: in Germany too, the richest ten percent receive more than a third of their total income, the poorest 50 percent only about a fifth. “And wealth inequality is much larger than income inequality,” Piketty said. According to him, 55% of the wealth in Europe is concentrated in the richest 10% of the population, and only around 5% in the poorest 50%.

Piketty also sees inequalities in education: “Since the 1980s, state spending on higher education has stagnated, although there are more and more people who wish to follow this education, which means that people from the poorest backgrounds have their way blocked ”. As an example, the economist uses a study from the United States: there, children’s access to universities or colleges is linked to their parents’ income. “While only about a quarter of the poorest children make it to college, 90 percent of the richest children do,” said Piketty.

It is also important to consider the inequality of climate change: “We will never be able to master these challenges if we do not also take into account the inequalities in CO₂ emissions – and look at who suffers the most from the consequences of climate change” a said Piketty. The richest are responsible for more emissions, but the poorest tend to bear the consequences.

When developing solutions, Piketty built on his already known suggestions for the conference: higher taxes on income and assets and redistribution. He also brought into play an adjusted CO₂ tax: “It is worth considering what a more progressive and fairer CO₂ tax might look like,” Piketty said and added: “I think this step will be necessary.”

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