• Germany edition
 
Schäuble moots hiking 'solidarity' tax to help rescue budget
Photo: DPA

Schäuble moots hiking 'solidarity' tax to help rescue budget

Published: 03 Jun 2010 18:32 GMT+02:00
Updated: 03 Jun 2010 18:32 GMT+02:00

In one of the more surprising ideas being thrown about, Schäuble stunned his senior colleagues by suggesting raising the Soli surcharge from the present 5.5 percent of a worker’s income tax to 8 percent, the Financial Times Deutschland reported Thursday.

The solidarity surcharge was set up nearly 20 years ago to pay for the revival of the moribund former communist eastern states. In recent years there have been growing calls to scrap it altogether.

But in the midst of Germany's worst modern budget crisis, all ideas are on the table as the government prepares to squeeze savings and boost revenue wherever it can. other ideas include a hike in tobacco tax, a new fuel tax for electricity generated by nuclear power could be introduced, and a surcharge on airline tickets.

This week the three party heads of the centre-right coalition, Chancellor Angela Merkel, Foreign Minister Guido Westerwelle and Bavarian premier Horst Seehofer met in the Chancellery to discuss an upcoming cabinet meeting on Sunday, where ministers will thrash out the necessary savings that need to be made to the overstretched federal budget, the FTD reported.

Seehofer and Westerwelle were appalled, both having promised tax cuts at the last election, the paper reported.

As the government searches high and low for savings, other ideas being discussed include cuts to Elterngeld, the payments to new parents who want to take time off work after the birth of their child, expected to save €200 million per year.

There is also a reported plan to delay the €550 million Berliner Stadtschloss construction project, which was due to begin in 2011.

Also under consideration is an extension of the autobahn charge on goods vehicles such as trucks, which is called the LKW-Maut. Under the toll, introduced in 2005 as a way of charging foreign freight vehicles for using German motorways, the average truck pays about 15 cents per kilometre.

The government had previously promised not to raise the toll in this legislative session, but on Thursday Transport Minister Peter Ramsauer told the Hamburger Abendblatt that it was still on the table. He added, however, that a similar toll on passenger cars was not being considered.

Good and services that currently enjoy a reduced sales tax or VAT could lose their special status. Even the recently-reduced sales tax on hotel stays could be reversed.

Nor will Germany’s armed forces escape the budget razor. There have been suggestions that Defence Minister Karl-Theodor zu Guttenberg is looking to reduce the number of soldiers from about 250,000 to 150,000 and abolish compulsory military service – a move that could save €400,000 million a year.

DDP/The Local (news@thelocal.de)

Don't miss...X
Left Right

Your comments about this article

05:56 June 4, 2010 by Don Felipe
This is not facing up to the new reality. Governments, certainly not just in Germany, have spent and borrowed their way to insolvency.

There is no more taxation fruit to be plucked. Due to the damage inflicted on the economy the tax base will now be shrinking, not increasing.

This is the time that governments start to shrink in size... but obviously they will have to be dragged kicking and screaming to this new reality.

Cutting 10% off budgets here and there is not the answer. Whole departments, and the legislation that supports their actions, will have to be scrapped.

Good riddance.
19:18 June 4, 2010 by Bushdiver
Is this guy crazy or what? This so called Soli tax should have been done away with years ago. I'd rather chip in to restore the wall and do away with this Soli tax. Typical German nonsense. Do the politicians here ever think of anything worthwhile other than adding or raising taxes?
17:39 June 8, 2010 by munchau
Better still that we lend -( or give as per a monetary union loans become transfers) Euro 200 bn to the Euro solidarity fund to bail out Portugal, Ireland, Italy Greece and Spain and soon France. This is of course just the start, in three years when the loans come due and Greece cant pay, we will have to roll this loan and lend even more to over the interest payments ECB lending to Greek banks is $78 bn euros too and ECB owns Euro 25 bn of Greek bonds so if they default, we as the biggest shareholder in the ECB will have to put more money in. Excellent raise taxes to fund the losses elsewhere
Today's headlines
Stakes rise in Oracle-SAP copyright fight
Photo: DPA

Stakes rise in Oracle-SAP copyright fight

US appeals court on Friday ruled that Oracle be given a choice between $356.7 million or a new trial for its copyright lawsuit against German rival SAP. READ  

Court rules against child porn suspect Edathy
Former SPD MP Sebastian Edathy photographed at a press conference in February. Photo: DPA

Court rules against child porn suspect Edathy

The Constitutional Court on Friday rejected an attempt by former Social Democratic (SPD) MP Sebastian Edathy to have evidence against him thrown out in his trial for possession of child pornography. READ  

Student busted in case of misdelivered hash
Photo: DPA

Student busted in case of misdelivered hash

A Bavarian student expecting a cannabis delivery was collared by "Commissioner Fluke" after acting surprised in front of policemen when he saw his letter box was empty. READ  

Security fears block Germany-Israel match
German and Israeli fans cheer in the stands during a friendly in Leipzig in 2012. Photo: DPA

Security fears block Germany-Israel match

A friendly soccer match against Israel marking 50 years of diplomatic ties has been called off amid security concerns and the escalation of the Middle East conflict, the German Football Federation (DFB) said on Friday. READ  

Germany's brain drain is Europe's gain
Inside the terminal at the Frankfurt International Airport. Photo: Shutterstock

Germany's brain drain is Europe's gain

Figures from the European Union show that while many German professionals are able to find work abroad with their well-recognised qualifications, Germany doesn't always extend the same courtesy to foreigners. READ  

S-Bahn arson in support of refugees, group claims
Passengers at Berlin's Ostkreuz station yesterday as information screens relay news of the disruption. Photo: DPA

S-Bahn arson in support of refugees, group claims

A radical left-wing group claimed responsibility on Friday for an arson attack that cut power to several S-Bahn lines and caused transport chaos in Berlin, saying it was intended to awaken people to the plight of refugees. READ  

Pilots' strike over, but disruption continues
Passengers in Hannover check departure boards showing cancelled Germanwings flights. Photo: DPA

Pilots' strike over, but disruption continues

UPDATE: Germanwings pilots have ended their six-hour strike which grounded 116 flights and up to 15,000 passengers of Lufthansa subsidiary Germanwings on Friday. READ  

Man narrowly escapes unwelcome drop-in
Emergency services use a crane to lift the fallen crane in Cologne. Photo: DPA

Man narrowly escapes unwelcome drop-in

A Cologne resident was pinned to his bed after a 40-metre construction crane toppled onto his home early on Friday. READ  

'Further sanctions' could hit Russia, says Merkel
Merkel looking grave at Thursday's West Balkan conference in Berlin. Photo: DPA

'Further sanctions' could hit Russia, says Merkel

German Chancellor Angela Merkel said on Thursday that European leaders will discuss the worsening Ukraine crisis and possible further sanctions against Russia at a weekend summit. READ  

UK-Germany rivalries live again in Champs League
Bayern Munich captain Philipp Lahm with fellow World Cup champion Bastian Schweinsteiger. Photo: DPA

UK-Germany rivalries live again in Champs League

The 2014-15 Champions League draw yesterday brought déjà-vu for English and German clubs as old opponents found themselves facing off once again. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Photo: Shutterstock
Gallery
Ten of the oddest things found by German border control
Photo: Gerkan, Marg and Partners/Tegel Projekt GmbH/J. Mayer
Berlin
How will Berlin look in five years' time?
Photo: DPA
Culture
Sprechen Sie Deutsch? 10 reasons why you should
Photo: DPA
Gallery
The best of Berlin's mayor Klaus Wowereit in 14 pictures
Photo: DPA
Politics
Germany sends burgers and sausages to Kurds
Photo: Matthias Kock
National
Tribes, ties and a movie: A German's Afghan life
Photo: DPA
Gallery
10 things to do before summer in Germany is really over
Photo: DPA
Gallery
The mysteries of Berlin's abandoned theme park
Photo: Europeana.de 1914 - 1918
Gallery
A German soldier's life behind WWI lines
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,480
jobs available
Toytown Germany
Germany's English-speaking crowd