The 'Soli': a tax on the rich?
For the past three decades, German taxpayers have paid a “solidarity contribution” from their wages, the purpose of which was to pay for the rebuilding of the former east to bring it up to par with the west.
In a project called Aufbau Ost, over a 150 billion euros were poured into building new roads, cleaning up polluted waterways, kick-starting productivity and generally tidying up the mess left by half a century of communist rule.
But in 2019, that project came to an end. Politicians decided that the rebuilding work had been completed and the project was closed down.
But the tax - commonly called the ‘Soli’ - stayed. The government adjusted its limits, meaning that it would only be paid by the top 10 percent of earners. But, an estimated €10 billion is still being paid in annually.
Now that the tax doesn’t have a specific purpose, it floats around in the federal budget and can be used for other projects such as state aid for businesses hit by lockdowns, or measures that have re…
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