Germany is proposing to levy extra taxes on the young to pay for the costs of the country’s growing numbers of old people, under government plans for a ‘’demographic reserve’’ levy.This is is a problem that is affecting many developed countries, Japan among them. As Michael Walsh points out:
Angela Merkel’s Christian Democrats have drafted proposals that, if law, would require all those over 25 to pay a proportion of their income to cushion Germany against a looming population crisis.
The German Chancellor’s ruling party is seeking extra sources of revenue to pay for soaring pensions and bills for social care costs as Germany’s ‘’baby boomer’’ generation ages amid a decline in the birth rate.
The Germans never really thought this whole la dolce vita thing through. They believed that, via a combination of the American nuclear umbrella and NATO forces (which meant they could cut their defense budget to nearly nothing) and the Teutonic ability to extract a stunning portion of worker salaries to spend on the “safety net” — a safety net that included months-long vacations, free medical care, and trips to spas — they could enter the work force at 28, retire at 50 and spend the rest of their lives in Italy or Greece at someone else’s expense. Nice work if you can get it. But now the party’s over.Unfortunately, nobody seems to want to admit that they have a hangover...