Those cuts are just for large businesses, the small ones and consumers get to pay for it.
It’ll trickle down aaaaaany day now.
Since I installed a keylogger on Scholz’ PC, I can provide some insight on how this decision was made …
--- KEYLOGGER OUTPUT START --- [TIMESTAMP: 2023-08-26 09:02:17] User Logged In [TIMESTAMP: 2023-08-26 09:03:11] "chat.openai.com" [TIMESTAMP: 2023-08-26 09:03:22] "How to stimulate the German economy?" [TIMESTAMP: 2023-08-26 09:15:55] "facebook.com" [TIMESTAMP: 2023-08-26 09:16:11] "Hey Hubert! Whats for lunch today? Schnitzel again?" [TIMESTAMP: 2023-08-26 09:35:28] "chat.openai.com" [TIMESTAMP: 2023-08-26 09:35:39] "No not like that. What would Angela Merkel do?" [TIMESTAMP: 2023-08-26 09:40:54] "youtube.com" [TIMESTAMP: 2023-08-26 09:41:33] "Epic cat fails compilation" [TIMESTAMP: 2023-08-26 11:02:20] "chat.openai.com" [TIMESTAMP: 2023-08-26 11:02:29] "Ugh no, what would Gerald Schröder do?" [TIMESTAMP: 2023-08-26 12:45:03] "google.de" [TIMESTAMP: 2023-08-26 12:45:17] "Schnitzel delivery near me" [TIMESTAMP: 2023-08-26 13:11:45] "chat.openai.com" [TIMESTAMP: 2023-08-26 13:12:00] "Ok, mix all those answers together" [TIMESTAMP: 2023-08-26 13:22:45] "summarize pls" --- KEYLOGGER OUTPUT END ---Lol throw money at the rich. Go on now, have fun with that.
Just today I read that ECB could increase the interest rate again, because the inflation rate is too high in Germany. From my limited understanding of economy, cutting taxes can only raise the inflation?
Our neoliberal party likes to blow money into big business ass. Everything else doesn’t matter to them.
Raising the interest rate (i.e. making loans more expensive) is the measure taken if there is a belief that there is too much demand for goods by the population (Keynesian inflation theory) or too much money in circulation (Monetarist inflation theory). It’s taken in the hope that reducing the purchasing power of the population will slow the price increase down with falling demand. Which is why you had mainstream economists talking of say the need to increase unemployment (i.e. take people’s incomes away) and how wage increases are bad due to the supposed theory of the wage-price spiral.
Wage-Price spiral
“Wage-price spirals, at least defined as a sustained acceleration of prices and wages, are hard to find in the recent historical record. Of the 79 episodes identified with accelerating prices and wages going back to the 1960s, only a minority of them saw further acceleration after eight quarters. Moreover, sustained wage-price acceleration is even harder to find when looking at episodes similar to today, where real wages have significantly fallen. In those cases, nominal wages tended to catch-up to inflation to partially recover real wage losses, and growth rates tended to stabilize at a higher level than before the initial acceleration happened. Wage growth rates were eventually consistent with inflation and labor market tightness observed. This mechanism did not appear to lead to persistent acceleration dynamics that can be characterized as a wage-price spiral” (IMF, Nov/2022)
Cutting taxes is a measure taken with the hope that with reduced costs, private enterprises will scale up production and increase the amount of goods’ supply as compared to demand, lowering or at least stopping the increase in prices, as orthodox economists hold the thesis that excessive demand (as supposedly caused by the 2020 Covid Crisis) is responsible for the currently high inflation.
Nowadays, it’s commonly accepted in many studies, such as this recent one from New Zealand that a significant cause in the inflation is the desire for even higher profits compared to what they already had in years prior.
Lowering taxes in response to a stagnant economy in this case is, as I understand it, unlikely to affect inflation, but is rewarding a private sector that used the fuel and energy price crisis caused by the war in Ukraine to enrich itself even as those prices fell again, with more riches. Especially considering the currently stagnant economy, it’s placing hope on a sector that has already failed to deliver out of an ideological belief that the state is unable to do what the private sector can, as well as the support it gets from and how many politicians have personal relationships with the private sector.
No, no, it only leads to inflation when taxes are cut for the working class, you see.
They’ve learned nothing from the U.S.
On the contrary, they’ve learned everything from the US.
This is the best summary I could come up with:
While Germany’s coalition parties have hesitated over the extent of the country’s tax cuts, the economy has remained static.
The conflict has seen German energy prices surge, after Berlin’s reliance on Moscow for gas was brought to a halt.
“We’ll discuss how to achieve a big boost,” Chancellor Olaf Scholz said at the start of a two-day cabinet retreat at Schloss Meseberg, a baroque castle outside Berlin.
The tax cuts are part of a 10-point program and intended to kickstart economic growth whilst making sure companies made the decision to invest in Germany, Scholz said.
The plan includes a premium for energy-saving investments, as well as rule changes to make it easier for companies to write off losses.
As Germany boosts spending, some critics fear that without a new European Union green fund, only larger economies with more fiscal power will be able to push ahead with national subsidies, leaving smaller countries behind.
The original article contains 282 words, the summary contains 144 words. Saved 49%. I’m a bot and I’m open source!
