Post on 18-Jan-2016
transcript
Germany
Brandon GoehringPreston Van WinkleChristopher Keizer
Julian Khalifa
German GovernmentGermany is a republic with a parliamentary democracy and a bicameral system of government, made up by the Federal Government, Federal Parliament, the Federal Council, and the Federal President.
Federal Government and Parliament
Federal Government known as Bundesregierung
Comprised of the Chancellor and their Ministers
Ministers are made up from members of the Federal Parliament.
Parliament known as Bundestang
Comprised of elected representatives
Elections held every 4 years
Representatives draft and pass legislation
Additionally, approve annual budgets and vote on the deployment of the German army
Federal Council and President
Council known as Bundesrat
69 members representing the state’s interests at federal level
Involved with creating and approving legislation.
President known as Bundespräsident
Elected for a 5 year term by Federal and State Parliament
Head of German State
Mostly ceremonial responsibilities within and outside of Germany
Ability to appoint and dismiss the Chancellor
Taxation in Germany
Germany is a Federal Republic
Taxes levied by three levels of Government
95 percent of taxes imposed on the Federal level
Major taxes
Income tax
Value Added Tax (VAT)
Corporate taxes
Abide by fiscal policy (general tax law)
Tax Break Down
•The taxation is broken down into classes based on income and personal status.
• class I = single
• class II = single parent (living alone with the child/children)
• class III = married and spouse has no income or lower income
• class IV = married and similar income to spouse
• class V = opposite of class III, ie this is the class your lower earning spouse has if you have III
• class VI= for a second job or for deduction without proper employee information
Major Taxes•Income Tax
• Use Progressive Tax structure
• Ranges from 0% to 45%
•Corporate Tax
• Generally just below 30%
•Value-Added Tax
• all services and products are subject to VATs
• 7% to 19%
Tax Revenue
•German Tax Revenue totaled €593 billion in 2014.
•Distributed to the three levels of German government
• Federation
• States
• and Municipalities
Tax Revenue of Germany
Spending•8 prominent expenditures.
• Health
• Social Security
• Defense
• Income Security
• Interest
• Education
• Environment
• International Affairs
German Spending
German Budget
•Prior to recession, Germany ran a deficit of 0.3 in 2007
Relatively small but still a deficit
• 2007 German budget proposed a 42.4 percent cut in revenues and a 2.3 percent cut in expenditures
• 2008 budget also proposed a cut to revenues, but of only 2.3 percent and an increase in expenditures of 2.5 percent
German Budget 2006-2010
Cause of the German Recession
Collapse of world trade markets (recessions in other countries) was the primary cause of the recession in Germany
This is unlike most other major nations like the US
Germany's recession is unique because it was not preceded by a large credit bubble.
Effects on the Economy
At the time of the German recession, the country was just beginning to decrease unemployment.
Before the recession, unemployment was about 10 percent
In 2007, unemployment was shrinking to about 8 percent
In 2008, unemployment bottomed out at about 7.5 percent
Effects on the Economy
Effects on the Economy
GDP went from 3435.68 B in 2007 to 3746.92 B in 2008 then dropped to 3412.98 B in 2009
Germany’s Recovery
Germany’s economy largely based off exports
Germany experienced a very strong 2006
Stronger than the United States’
Unemployment was steadily falling
Past decades spent reforming the labor market
Entering the recession, Germany was in a very strong position
Germany’s Recovery
Rather than cut jobs, German government encouraged firms to cut hours
Workers who lost hours were issued income subsidies
Large drop in output, minor increase in unemployment
Far less unemployment than the US or any other major nation
Average workweek hours fell below the United States’
Total hours worked remained above the United States’
Germany’s Recovery
China one of Germany’s largest trading partners
Many German goods exported to China
As China began to recover, Germany began exporting goods immediately
Firms didn’t need to hire new employees
Simply had to increase the hours of their current workers to increase production
Europe’s recovery was not as swift
Many European nations still recovering meant a weak Euro
This lowered the real cost of German exports
Quick recovery due to multiple factors
Rather than cut jobs, firms cut hours and the government provided income subsidies
A weak Euro made German exports more appealing to foreign investors
Works Cited Page
http://commonslibraryblog.com/2014/02/26/recession-and-recovery-the-german-experience/
https://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000202696/Germany's+2007+Federal+Budget%3A+Finance+Minister+Pe.PDF
http://www.economist.com/blogs/freeexchange/2010/11/cross-country_comparisons
http://www.ukgermanconnection.org/politics-german-government
http://www.heritage.org/index/country/germany
http://www.concordcoalition.org/learn/budget/federal-budget-pie-charts
http://data.worldbank.org/indicator/NE.CON.GOVT.ZS
http://www.vatlive.com/country-guides/germany/german-vat/
http://www.economist.com/blogs/freeexchange/2010/11/cross-country_comparisons
http://www.nytimes.com/2013/05/11/business/economy/a-faster-recovery-in-germany-than-elsewhere.html?_r=0