The general election might still be five months away, but the centre-left Social Democrat Party (SPD) will sign off on its campaign platform this Saturday and already several proposals have started making waves – particularly the party's tax proposals.
Though the tax code might not seem like a particularly rousing way to marshal voters, the SPD is betting people will be looking at their pocketbooks during these challenging economic times.
Besides hoping to tap a bit of populist rage over the global financial crisis by calling for higher taxes on the rich, the Social Democrats have mooted the idea of a “tax bonus” for those willing to forego filing an income tax return.
If you're an average employee without income beyond your normal salary, the SPD would pay you €300 for ostensibly helping cut down paperwork and bureaucracy. This would, of course, assume you trust the taxman and that you wouldn't stand to get a larger refund by filing a return. An estimated five million German taxpayers would qualify for the no-file bonus.
A blatant campaign gimmick aimed at boosting the SPD's lousy poll numbers? Perhaps. The party's proposal has been widely panned by both taxpayer groups and its political opponents.
The SPD candidate for chancellor, Foreign Minister Frank-Walter Steinmeier, on Friday told the daily Süddeutsche Zeitung said he didn't want to run as the “candidate of tax hikes” in his attempt to unseat Chancellor Angela Merkel this autumn. However, a recent poll showed a strong majority (59 percent) of Germans actually back higher taxes on the rich.
The Social Democratic campaign platform would raise the top income tax rate from 45 to 47 percent and would cut the income level for that rate in half.
Not to be totally left out of the tax policy frenzy, some members of Chancellor Merkel's conservative Christian Democratic Union (CDU) have suggested axing the “solidarity surcharge” that has been used to subsidise rebuilding the once dilapidated communist eastern half of Germany.
But that idea has been quickly panned by many in the CDU – likely because it would end up costing the party votes in the east this autumn.