Magazine

Why Germany Needs Loopholes For The Rich


Re "Write-offs ride off into the sunset" (European Business, Oct. 10): Germany's taxes on higher incomes are unacceptably high. In the past the government came up with tax shelters to give the "very well-off" ways to legally reduce their taxes. If these loopholes are closed, many affluent citizens will change their tax residency to countries that have a more moderate approach. Within the European Union, people and money can move wherever they want to go. In past years, Germany often came up with splendid ideas for tax revenue increases only to discover that, in the end, the country took in less than before. The reflexive war cry of any German politician to fiscal problems is "raise taxes!" -- not "curb spending."

J?rg Boese

Prague, Czech Republic

Brian Bremner's article "Still curing yesterday's disease" (Finance, Oct. 10) castigates the Bank of Japan for continuing to act as if it is treating a sick economy. Yet while Japan may be walking again, it still needs crutches. Certainly, for the first time after the "lost decade," the major indicators are encouraging. Industrial output, "salaryman" (company workers') wages, and investment are all on the rise. Deflation seems to be under control, unemployment is falling, and property prices are steadying.

However, the government is planning a further cut of 5% in the salaries of civil servants next year. Private universities will implement further matching cuts, having done so this year, while national universities are part of the civil service. And, as Bremner correctly notes, the government is determined to raise taxes. When the economy is in distress, the last thing a government should contemplate is eroding consumer buying power, the real backbone of the economy. Relying on exports to China is no panacea.

Ali M. El-Agraa

Fukuoka University

Fukuoka, Japan

Re "Q: What's bigger than Cisco (CSCO), Coke (KO), or McDonald's (MCD)?" (People, Oct. 10): What is so innovative or admirable about Cerberus Capital Management LP? A guy attracts a pile of money from well-heeled people looking for outlandish returns and then buys companies all over the place, dispatching lieutenants to run businesses they know little about, thereby inspiring confidence and undying loyalty from the thousands of employees in these companies, many of whom are ticketed for dismissal.

Back in the 1970s there used to be a name for this kind of operation: conglomerate. It has been discarded because it didn't work.

Milton Moskowitz

Yonkers, N.Y.


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