German Krankheit: Incentives for the Impossible for Lack of Guts

German idealism and common sense have always been on a
collision course. As Germany wishes to be a world champion in the
campaign against global warming, yet again the worst in not making
sense comes out in the country.

German transport minister Wolfgang Tiefensee plans a radical tax reform for vehicle
owners. Instead of the size of the vehicle's motor, emission is
Tiefensee's target. CO2, as well as microscopic dust and other
emissions are to be the measure for higher taxation. Tiefensee's
rationale is that the consumer is supposed to get an incentive
(wirtschaftlicher Anreiz) to buy cleaner cars. Set aside the fact that
taxation is not within Tiefensee's portfolio, there is an interesting
point in this discussion.

"Economical incentive" has been a euphemistic synonym in Germany for years - always translating
into something like "higher taxation for the consumer". Under his
proposals, Tiefensee says, users of clean vehicles are to be rewarded
at the expense of those using older, unclean vehicles. As a matter of
fact, drivers as a whole are not supposed to pay more vehicle taxes.

If one were to examine the social effects of such taxation, it would
probably mean that for wealthy drivers of four-wheeled monstrosities,
called SUVs, the new taxation will probably not make any difference.
Any amount of tax would probably of little importance to those who can
afford the 80,000 Euro plus to purchase one of these vehicles. Those
with new cars will probably not have to worry for a while. The
vanishing lower middle class in German society, indeed, has to worry.

The German car fleet has been aging on average for years now, as high
taxation, and the so-called "eco tax" (pushing the tax portion of
petrol prices to about 75 Eurocent in every Euro already) has literally
driven many drivers from the road. If the aging fleet will now be taxed
even higher, the effect is certainly going to be a retrogressive
development in mobility.

At the same time that Tiefensee propagates his new Tax plans

• state subsidies for public transport such as buses and rail were cut back by
  4 bn Euro annually, leaving many with no choice but to use their car
  and spending a good portion of their income just to afford their daily
  journey to work,
• Berlin politicians on average still roam the streets of the German capital in Audi A8 limousines with high-volume engines,
• there is no mentionworthy fleet policy, imposing maximums for average fuel consumption on car makers.

To the contrary: The consumer is left with little or no choice, the tax
gun is pointed to his head with all but no possibility to comply with
Tiefensee's wishes. When the EU-commission recently wanted to fix
maximum emissions of CO2 to 120 grammes per Km, the German car industry
threatened that it would cancel jobs and was intending to stick to its
old-fashioned 140 grammes threshold. After a tug of war lacking any
dignity, 130 grammes were set, and Tiefensee was found trying to
untooth the European legislation by setting model-specific limits.

Which brings us to a very elementary trait of German politics: It is unable,
and probably gutless, to counter the continued bluff on behalf of its
industry to create large redundancies if there was anything like a
faint attempt to set out targets it has to reach.

To date, there
is no German-built hybrid car available in volume to the German
consumer, and the research on clean emissions lags years behind the
French auto industry. Now, pretending to give consumers an "incentive"
by tax hikes therefore is another way of admitting to a lack of guts
and symbolic policies.

German idealism paired with a dismal lack of courage has been a trademark for German politics for long. As the
devastating effects of greenhouse gases become clearer, German politics
is still seesawing about to actually reverse its stance on nuclear
energy. Just like the outcome of vehicle taxation is likely going to be
a regress in mobility, higher energy taxation for at the expense of
households and consumers will likely be used to give industry a tax
break for polluting technologies, and throttling energy consumption.
For the lack of clear outlines and choices in the debate, this is
likely to produce what German politics has been producing at an
increasing pace since the late 1980's: Industrial decay.