Solidarity tax is usually levied by a government to help provide funds for projects and initiatives that are aimed at unifying the public around one or more specific goals. Most often, the tax is calculated as a percentage of total income and is additional to personal or organizational income tax. In some cases, the solidarity tax is calculated according to personal and organizational income thresholds, but in others it might be a flat percentage or rate. Such taxes are usually controversial with the public, because often the tax is levied in an attempt to create funds to either offset a financial crisis or to finance projects that have no other realistic alternative, which may not garner full public support. Over the years, many countries have implemented or considered such a tax as a response to a diverse range of situations, usually to the dismay of the public.
Germany is often cited as one such nation to make use of the solidarity tax. In 1991, with the reunification of East and West Germany, the government needed to create a fund that could expedite reunification and provide capital for the newly integrated administration. Levying a solidarity tax at a flat rate of 7.5% on all personal incomes, regardless of the level of income, was the chosen solution. While at first presented to the public as a short-term measure, the tax was removed after a year, but then levied again in 1995 and dropped to a rate of 5.5% in 1998, continuing through 2011 and prompting legal challenges based on the constitution. With legal challenges yet to resolve the constitutional bases of the tax, it is due to stay on the books until 2019.
Similarly, other nations have either introduced or considered levying a solidarity tax to address social-financial concerns. In 2011, some countries falling under the umbrella of the European Union viewed such a tax as an opportunity for them to get out from under the crippling debt that saddled their economies. Unveiling the tax in its proposal to the World Bank and IMF regarding austerity measures, Greece proposed a solidarity tax, which it subsequently levied, requiring Greek taxpayers to remit up to 5% of their income, depending on their annual salary. This unsurprisingly resulted in riots in the streets, but the tax prevailed.
Italy as well has considered the option of implementing a solidarity tax in an attempt to gets its debt woes under control in 2011. Consideration for the tax in this case, however, was aimed specifically at the wealthy rather than all taxpayers in Italy. After deliberation on the overall impact of debt control, Italy changed course, however, and removed the potential tax from its austerity proposals to the World Bank and IMF.