Merkel Pledges Tax Cuts Despite Rising Deficit
BERLIN — German Chancellor Angela Merkel defended her plan to cut taxes despite the country’s soaring budget deficit as she introduced her conservative alliance’s manifesto ahead of national elections in September.
Lower incomes taxes would “provide motivation” and encourage economic growth, Ms. Merkel told a conference of her party, the Christian Democratic Union, and its Bavarian sister party, the Christian Social Union.
“It would be wrong not to do what is right and necessary for growth, and so prevent ourselves emerging quickly from this crisis,” Ms. Merkel said in her conference speech.
The conservative parties’ election platform promises tax cuts worth €15 billion ($21 billion), but gives no time frame. The parties plan to cut the lowest income tax rate to 12% from 14% at present, raise the threshold for paying the top income tax rate of 42%, and reduce the degree to which a rising income leads to a progressively higher tax rate.
However, Germany’s widening budget deficit has led to expectations the next government might have to plug the budget gap with higher taxes. Some state governors and lawmakers from the Christian Democrats have in recent days suggested raising some sales taxes to increase revenue, a debate Ms. Merkel is struggling to stamp out.
[More]
Popularity: 33% [?]
Male, retired and the rest is of little interest to anyone. The site keeps me busy and if it helps others to stay abreast of daily events then my time is well spent.
Cunctator Says:
Lowering taxes is always preferable to increased government spending. It would even be better if governments would either introduce a flat tax (as has happened in some Central European countries, to good effect) or simply abolished income tax and raised all revenues from consumption taxes.
The problem with most so-called conservative governments — Canada’s included — is that they fail to recognise that income is private property. Their first task should be to defend private property, from which all our other freedoms derive.
Posted on July 1st, 2009 at 7:45 am