December 6, 2011 / 3:41 PM / 6 years ago

German SPD want higher tax on rich if back in power

5 Min Read

BERLIN, Dec 6 (Reuters) - Germany's opposition Social Democrats (SPD) agreed on Tuesday to make a demand for higher taxes on the rich a cornerstone of their programme for the 2013 election.

The centre-left SPD made no progress, however, in picking a candidate to challenge Chancellor Angela Merkel in the election due in late 2013. A trio of former ministers under Merkel in the previous grand coalition government are in the running.

Pressure on the party to choose a candidate has risen in recent months after former Finance Minister Peer Steinbrueck expressed interest in becoming chancellor and opinion polls suggested he could beat Merkel.

But SPD Chairman Sigmar Gabriel and parliamentary floor leader Frank-Walter Steinmeier are also contenders. The party insists it will wait until late next year to pick the candidate with the best chance of beating Merkel and her conservatives.

Gabriel, Steinmeier and Steinbrueck all appealed for harmony in the notoriously fractious SPD after it fell out of power in 2009 with its worst post-war election result, tumbling to 23 percent to the conservatives' 33.8 percent.

In recent opinion polls the SPD has narrowed that gap to 34-28 percent. The SPD's preferred coalition partner, the Greens, are well ahead of the conservatives' junior partner, the FDP, with a 15-3 percent advantage.

"We want to be ruling in two years' time," Gabriel told delegates to the SPD annual congress in a fiery 90-minute speech. German media said the congress may well have raised his chances of leading the party into the 2013 election.

"The people out there have noticed that things aren't running the way they should be and it's up to us to put them back in order," said Gabriel, a former environment minister in Merkel's grand coalition that ruled from 2005 to 2009.

Gabriel ruled out a return to power in 2013 as junior coalition partners to Merkel's conservatives. He said the SPD wants to rule with the Greens again after their first seven years together at the federal level from 1998 to 2005.

The SPD is in opposition at the federal level but governs in 10 of Germany's 16 federal states, giving it the power in the upper house of parliament, the states' chamber, to block some legislation from Merkel's centre-right government.

Gabriel and Steinmeier, a former foreign minister, were able to prevent the SPD's left wing pushing through demands for even higher taxes at the party congress. The party agreed to increase the top tax bracket from 42 percent to 49 percent. The last SPD-Greens government had cut the top tax bracket.

The two also blocked an attempt by the left wing to force through a "rich tax" of an additional 3 percent on incomes over 125,000 euros per year.

Steinbrueck, who analysts say appeals to centrist voters and even some conservatives more than to the left wing of his own electorate, had spoken out on Tuesday strongly against the sock-the-rich mentality.

"The SPD needs to organise a strong alliance between the well-off and the not-so-well-off," he said. "But we can't go out and annoy the well-off just to make this alliance work."

Steinbrueck tried to win over the party that has remained somewhat cool to his possible candidacy -- in part because he has broken a tacit ban on party leaders putting themselves forward as candidates -- with a straight-talking speech.

He went out of his way to praise the reform measures of the last SPD chancellor, Gerhard Schroeder, even though those painful steps squeezed the unemployed and underemployed and contributed to loss of leftist support that cost the SPD power.

"Where would Germany be today without the bitter reforms carried out under Gerhard Schroeder?" Steinbrueck said. "We ought to be more self-conscious about talking about all the things we've done to make the last 10 years a success."

The delegates gave Gabriel and Steinmeier far more applause than Steinbrueck. Several German media organisations said that Steinbrueck did not do his candidacy any favours on Tuesday.

"Steinbrueck held more of an academic speech that appealed to peoples' reason while Gabriel appealed to the party's emotions," said ARD television correspondent Sabine Rau.

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