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Court rules ‘reunification tax’ unconstitutional

DPA/The Local · 25 Nov 2009, 17:15

Published: 25 Nov 2009 17:15 GMT+01:00

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Judge Georgia Gascard ruled in favour of a plaintiff suing against paying €1,000 for the Solidaritätszuschlag on top of his 2007 income taxes. He argued the surcharge meant to fund the reconstruction of Germany’s formerly communist eastern half was never meant to be levied indefinitely.

The costs for German reunification “is a long-term necessity that cannot be covered by levying a supplementary tax,” which Gascard said was allowed only temporarily according to a legislative procedure from 1954.

The judge has referred the case to Germany’s highest court in Karlsruhe for ruling on the fundamental constitutionality of the Soli, which was first introduced in 1991 shortly after reunification. Should the Constitutional Court confirm Wednesday’s ruling, the government could face a gaping hole in its budget.

After several incarnations in the 1990s, the special tax has been set since 1998 at 5.5 percent of income taxes, capital gains and corporate taxes. A direct tax, it brings in roughly €12 billion each year for the federal government. However, the funds do not necessary support reconstruction efforts in eastern Germany, exposing it to criticism from taxpayer groups.

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“It’s unthinkable to me that a supplementary tax can become a permanent tax,” said Karl Heinz Däke, the president of the German Taxpayers Association. “The decision today makes it hard for politicians to levy other special taxes.”

DPA/The Local (news@thelocal.de)

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Your comments about this article

18:01 November 25, 2009 by lordwilliams629
This is the same thing the left does in america, they use any excuse they can to make a new tax.
18:24 November 25, 2009 by berlinski
So what will happen now? Will these taxes be refunded or will they find an excuse to keep them? This amounts to a lot of tax being paid back. I cannot see it happening.
20:01 November 25, 2009 by pepsionice
This is a state court that decided this....not the German supreme court. I would imagine that it'll take six months to reach the higher court....and they will be faced with a serious issue. The guy is right......they are not using the fund the way that it was supposed to be used...and it was never to be a permanent fund. Personally......I've worked and paid German taxes for a decade now, and this is pretty stupid myself.

If they toss it...the political idiots will have to find another method to tax people. Just like the MAUT tax.....tax the truckers who will pass the tax costs onto the consumers....that was a 5-star idea and made billions for the government. I'm expecting an internet tax anyday now.
09:19 November 26, 2009 by Bushdiver
First of all I wouldn't be so sure that the higher court in Germany will go along with the lower courts ruling but even if they do I doubt seriously that they will be refunding any money. If this law is voted down you can rest assured that there will be enough new taxes created to more than cover what they lose on the Soli tax. Remember, this is "Steuerland" were talikng about. I won't say that all the tax money was wasted or somehow other reallocated. The highways in Eastern Germany are now better that the ones in the west. I would think that the wages in the east don't compare to the wages in the west simply because the cost of living there is much cheaper than say the cost of living in Frankfurt am Main. I travel there on business fairly often and the prices on practically everything is lots cheaper than here in Frankfurt.
10:31 November 26, 2009 by emeth_calormene
You guys think you've got problems? When the British Parliament introduced income tax it gave a solemn promise that it was a temporary measure to last only until Napoleon Bonaparte was defeated.

He's obviously skulking somewhere in continental Europe waiting to launch another attack!! ;-)
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