Why are there social differences, rich and poor, at all?
Through heirs of assets. Through speculation with shares or real estate. By working very hard as an entrepreneur or employee with mixed fortunes. You can be a millionaire and still spend everything or lose it by gambling. That is life. There is no justice. Only opportunities.
Karl Marx was right on one issue: ‚Sharing productive capital‘ is crucial. This is the only way to generate great wealth, by owning real estate or shares or companies.
A social market economy must provide opportunities for prosperity and support creation of wealth. This is part of social justice. How does that work?
What is important is participation in capital. Not socialist dreams of expropriation, but real shares.
We live in a paradox. Assets can only be built up if the state does not take away private income by excessive taxes. Therefore, the most important element for broad wealth accumulation is a flat income tax rate, e.g. 20 percent. More net wealth creates the most wealth for all. This enables citizens to create wealth over the years, for example.
The exploding bonus schemes of executive boards of public limited companies in the last ten years are a scandal. These executives sit at the gear levers and think of themselves first. In all stock corporations, employees should also be given the opportunity to benefit from increases in value. To this end, they should receive the opportunity to acquire shares at special conditions and options. Ideally every year up to the level of their own gross remuneration. This would give hard-working workers and employees a fortune over their 30 years of service. Making work pay. It is important to keep taxation at a low level of 20 percent. This is in the interest of workers and employees. The trade unions have failed in this respect, although they are re- presented on the supervisory boards of co-determined companies in Germany. Their ideological fixation on wage increases (which are necessary), higher taxes and redistribution does not create wealth for workers.
- The innovative proposal of Bill Ackman, founder of Pershing Square Capital Management Fund, for a “Birthright Fund” should be implemented: the government transfers a starting balance of only $6,740 for every new citizen. The money would be firmly invested in a zero-cost equity fund until age 65. At the funds’ historically proven profit (equity return) of 8 percent annually, $1 million would be available to each citizen after 65 as retirement savings. This profit should remain tax- exempt.
- Tax-optimised asset accumulation and employee participation in their companies( à la Karl Marx) are core tasks of a Social Market Economy – and socially just. Needed tax-free and with a general flat-tax of 20 percent- to leave more money in the pockets of the people.