• Germany's news in English
 
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

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)

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
LG offices raided over suspected vandalism
A Sumsung washing machine. Photo: DPA

LG offices raided over suspected vandalism

South Korean prosecutors raided the Seoul headquarters of LG Electronics on Friday following allegations that the firm's executives vandalised their rival Samsung's washing machines at a trade fair in Germany, company officials said. READ  

Neuer cautious over Ballon d'Or prospects
Photo: DPA

Neuer cautious over Ballon d'Or prospects

Germany's World Cup winning goalkeeper Manuel Neuer on Friday played down his prospects of securing the World Player of the Year award over holder Cristiano Ronaldo and Lionel Messi. READ  

News Feature
No Boxing Day football tradition for Germans
Germans football fans will have nothing to watch this Boxing Day Photo: DPA

No Boxing Day football tradition for Germans

Defying national stereotypes, it is British footballers who will be braving the freezing cold to take to the pitch on Boxing Day, whilst Germany's players are already sunning themselves on their winter break until the end of January. READ  

Germans hit back at anti-immigrant movement
Demonstrators protest against PEGIDA. Photo: DPA

Germans hit back at anti-immigrant movement

Business leaders, the political class and average Germans are pushing back against a growing anti-immigrant movement, saying it threatens the values and image the country fought hard to establish since the war. READ  

German president urges refugee compassion
Photo: DPA

German president urges refugee compassion

Germany's president appealed in a Christmas message for compassion and openness towards refugees coming to the country, which is grappling with a growing anti-Islam movement. READ  

Reward offered for €150k homing pigeon
A female homing pigeon. Photo: DPA

Reward offered for €150k homing pigeon

A breeder in Düsseldorf has offered a €10,000 reward after thieves stole a homing pigeon worth €150,000 from his aviary. READ  

Royal palace restored to glory after €4.5m refit
The vestibule of the Schloss Charlottenburg, which reopens on Boxing Day Photo: DPA

Royal palace restored to glory after €4.5m refit

The royal palace of Fredrick the Great in Berlin is to fully reopen to visitors on Boxing Day after a 4.5 million euro refit. READ  

Bertolt Brecht statue hit with potato salad
Bertolt Brecht and his salad. Photo: DPA

Bertolt Brecht statue hit with potato salad

Bertolt Brecht's statue in front of the Berliner Ensemble theatre was splattered with potato salad by pranksters early on Tuesday morning, in a protest against supposed gentrification of the capital by wealthy southerners. READ  

'Cursed' Christmas Market catches fire
The ferris wheel at Alexa Christmas Market where a man fell to his death last week Photo: DPA

'Cursed' Christmas Market catches fire

A blaze at one of Berlin's biggest Christmas markets has caused locals to wonder if the place is cursed. READ  

JobTalk Germany: Entrepreneur series
'Don’t be skimpy in rewarding top talent'
Taulia co-founder Bertram Meyer. Photo: DPA

'Don’t be skimpy in rewarding top talent'

In our weekly feature series, The Local looks into a successful entrepreneur's life - the story behind their successes, major challenges and how being an entrepreneur changed them forever. This week, Sparsh Sharma talks to Bertram Meyer, one of the four German co-founders of Taulia. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
Top 12 German idioms
Willy Brandt at his inauguration in 1972. Photo: DPA
National
Willy Brandt: the man, the chancellor... the airport?
Dresden skyline and river by night. Photo: DPA
Politics
What does Dresden have against Muslims?
Sponsored Article
Why are these International Baccalaureate students cheering?
Germany's national football team lifts the World Cup trophy
Gallery
Germany's most-Googled words of 2014
National
Why has The Local got a new logo?
Photo: DPA
National
This German was abducted and tortured by the CIA
Culture
10 top tips for partying in Germany
Sponsored Article
Top ten gifts for an expat Christmas
Photo: DPA
Technology
What does the Chancellor see as the future of the internet?
Photo: DPA
Culture
Stuff your face with these festive German cookies
Photo: DPA
Culture
What do beer, breakfast cereal and dildos have in common?
Culture
The Local's guide to German Christmas markets
Sponsored Article
Top five quirky Christmas jumpers
Photo: DPA
Culture
Get ready for Christmas like a German. We tell you how.
Photo: DPA
Munich
She did what with her dead mother?
Photo: DPA
National
Germany still paying for crisis fall out
Photo: DPA
Culture
Saxon wurst is the worst, Christmas market declares.
Photo: DPA
Politics
Can 'sorry' ever be enough for the Linke?
Photo: DPA
Berlin
The Local's series on 25 years since the fall of the Berlin Wall
Photo: DPA
Gallery
See how Berlin has changed in 22 photos
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

3,162
jobs available
The Local Spain is hiring!
The Local is seeking a new editor for our site in Spain to join our growing team of internationally-minded, driven, ambitious and clued-up journalists.
Details and how to apply
Toytown Germany
Germany's English-speaking crowd