March 11 (Bloomberg) -- Germany’s Social Democrats agreed on an election platform that would raise the top income-tax rate and set a national minimum wage, reversing policies pursued by Gerhard Schroeder, the party’s last chancellor.
The main German opposition party’s blueprint for unseating Chancellor Angela Merkel in Sept. 22 elections includes calls for narrowing the rich-poor gap in Europe’s biggest economy and tightening financial regulation. Peer Steinbrueck, the SPD chancellor candidate who was Merkel’s first-term finance minister, presented the platform in Berlin today.
“This federal election will be decided on social issues,” Steinbrueck told reporters. The SPD wants to “tame financial capitalism” because many voters view politicians as “stooges” of the markets, he said.
Steinbrueck is summoning classic Social Democrat themes in his bid to deny Merkel a third term as voter approval of her response to the euro area’s debt crisis since 2010 keeps her the nation’s most popular politician. Still, polls suggest both Merkel’s coalition of her Christian Democratic bloc and Free Democrats and an opposition SPD-Green alliance lack the votes to form a government.
The SPD would increase the top income-tax rate to 49 percent from the current 45 percent, reinstate a wealth tax, set a legal minimum wage of 8.50 euros ($11.05), and boost aid to families with children, according to the platform, which requires formal approval by a party convention in April.
Raising income taxes would undo part of Schroeder’s “Agenda 2010,” a labor-market and benefits overhaul he began a decade ago this month. Schroeder cut the top rate to 45 percent from 53 percent under the program, which reduced record unemployment and boosted German competitiveness. Faced with protests over the welfare-state cuts, Schroeder called early elections in 2005 that Merkel won.
Steinbrueck said higher taxes on the richest Germans are needed partly to meet debt-reduction rules written into the constitution by Merkel’s coalition and touted by her as a model for highly-indebted euro countries. Additional revenue will be channeled into infrastructure and education, he said.
The SPD’s tax plans “are like an attack on Germany’s Mittelstand,” the small and mid-size companies that make up the economy’s backbone, Kurt Lauk, who heads the business caucus of Merkel’s CDU, said in a statement. “The foundation of our strong, successful place for business would be gravely damaged.”
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