How often have we heard it in recent years from high German politics? The German pension entitled person should please make private retirement provisions due to expected low pensions. So, everything purely in equities and equity funds? Basically nothing would argue against it? But the Federal Minister of Finance, Olaf Scholz, is currently shooting the bird. For weeks now, there have been increasing signs of increasingly absurd tax plans, which will hit small savers in particular hard, who are taking their old-age pension provision into their own hands, as demanded by politicians, and buying shares or equity funds, for example.
At the moment it is quite normal for equity investments. Losses can be claimed for tax purposes. What remains as profit is ultimately taxed. But Olaf’s officials have come up with something brilliant. If stock corporations go bankrupt completely, and the investor suffers thus a 100% total loss, he is not to be able to deduct these losses any longer from profits from other share investments (adviser draft to the so-called annual tax law 2019). The same should also apply to bonds, where creditors can no longer repay the bond when it matures. How absurd! Unbelievable! So anyone who gets wind of it shortly before the insolvency of a company, sells it quickly and makes “only” a 99% loss with his investment can claim this loss for tax purposes. But the one who notices it too late and makes 100% loss can no longer claim this loss? Simply unbelievable!
Financial transaction tax
But that’s only a trifle compared to the planned financial transaction tax. As the word suggests, share transactions should be taxed. So a sales tax. But derivatives should not be taxed. The “good” German Michel, who wants to invest money for his retirement in the long term, pays a tax. The gambler who trades options, futures and other things remains unaffected by the tax. Even more absurd is not possible, Olaf Scholz! And something else. The fund companies, which buy shares for the small saver, must then pay this tax consequently also. Thus the net yields of very long-term oriented savers would decrease noticeably. So anyone who wants to invest for retirement by investing in funds is the fool. Well, the ECB has abolished the interest on the good old savings book. So purely in shares? No, Olaf Scholz is already waiting.
The consequence could be that the German, who is anyway rather a stock grouch, says goodbye even more to investments in shares or equity funds. As a result, the proportion of foreign investors in German stock corporations continues to rise, and decisions about German companies can therefore be made even more strongly by, for example, hedge funds in far-flung places that hardly have the local public interest in mind. Please also have a look at the following interesting video of Mission Money (german) on this topic from minute 1:00.