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Majority of Germans against Merkel's tax cuts

DDP/The Local · 8 Jan 2010, 10:46

Published: 08 Jan 2010 10:46 GMT+01:00

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Chancellor Angela Merkel’s conservative Christian Democrats (CDU) and their junior coalition partners the pro-business Free Democrats (FDP) only narrowly succeeded at passing controversial €8.5-billion in tax relief in December. But the government has made no secret the package is just a taste of larger cuts planned for the coming years.

However, many economists have said the country's dire finances cannot handle the new fiscal measures, and the poll showed that most Germans agree. Some 58 percent of those asked by ARD said they were against the tax cuts, while 38 percent said they were in favour of a sweeping tax reform in 2011.

Among CDU supporters some 56 percent were against the government's tax policies, and 36 percent were in favour.

Even the majority of FDP supporters were against the coalition’s decision. Some 53 percent said they did not support their party’s plans to lessen their tax burden, while 43 percent said they would still be in favour.

The most resistance came from the highest earning poll participants, who make more than €3,000 after taxes a month. Just 31 percent of the wealthy said they supported paying fewer taxes, and 69 percent were opposed.

Forty-nine percent of lower-income households, which earn less than €1,500 after taxes, said they would welcome tax cuts. Another 45 percent said they didn’t think a few extra euros were necessary.

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When asked whether the tax cut levels were appropriate, participants were split almost evenly. Forty-five percent said they were acceptable, and 44 percent said they were too high. Just one percent said they were too low.

The poll was conducted for ARD by Infratest dimap, who questioned 1,000 citizens on Monday and Tuesday.

DDP/The Local (news@thelocal.de)

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Your comments about this article

15:54 January 8, 2010 by Bushdiver
These proposed tax cuts don't do a thing for the average citizen. It's another slap in the face to most people. And that the wealthy are mostly against paying more taxes doesn't surprise me.
16:14 January 8, 2010 by langohio
Bushdiver, you might want to re-read the article. The highest level of opposition to the tax cuts is among the wealthiest taxpayers: 69 percent. So the article doesn't report that "the wealthy are mostly against paying more taxes...."

This is all counter-intuitive to a U.S. citizen. Germany is much more "sozial" than America. Bravo!
19:43 January 8, 2010 by Jazzineva
I despise the sales taxes here because they hurt everybody across the board. But I have yet to hear they plan to cut them. Would love to be wrong. Otherwise, I'm pleased the public doesn't support lower income taxes and wish the idiot politicians would listen to them. Power to the people!
21:32 January 8, 2010 by tbelstler
It appears that the Germans are going to follow the US model as far as financial management is concerned - keep spending, keep cutting taxes and don't worry for one NY minute about paying for anything. The Germans too can have it all at absolutely no cost to the present generation.
12:13 January 9, 2010 by scout1067
The problem in Germany and the US is not cutting taxes, it is cutting taxes without equivalent spending cuts. In fact, they should probably cut spending even more than they cut taxes so that some surplus can go to paying down the national debt. There is no way a national debt approaching 25% of GDP is sustainable. Don't believe me, ask the Greeks.
12:31 January 9, 2010 by Rhinob
The bottom line is tax increases LOWER government receipts. Tax decreases that stimulate job growth and spending INCREASE government receipts. Instead of taking more of the pie that exists, Merkel's idea is to increase the size of the pie. She needs to defy the critics, do the tax cuts, and watch them try to explain away the increase in tax revenues to the government. The problem for SPD types is that when this works, it will shred the planks in their lefty political platform. Conservatism is on the rise, but only if the conservatives stick to their values and not go on spending sprees because they're in charge.
18:47 January 9, 2010 by amperrymd
Good point rhinob. Tax rates and tax receipts are two different things. If the intent is to maintain or even increase government revenues then cutting tax rates may be the best option and increasing tax rates may result in lower revenues. If the overall economy improves by reducing tax rates then all will share in the improvement, the general public and government alike. Liberals often accuse conservatives of simplistic thinking but I think the reverse is generally the case.
19:49 January 9, 2010 by Talonx
This is why I like living in europe over the U.S., when officials propose Reaganomics-type reforms even the rich are socially responsible enough to say, 'no, that's probably not the best idea.'

Good to know that even if the U.S. govt. didnt benefit from the lessons of that failed thing we call Reaganomics, at least someone did (Europe).

As for conservativism (american-style from what you too seem to be plugging), it's no wonder that most proponents of young-earth creationism come from that stock of thinking, if it isn't wishing that world ecology has always been the way it is today, it's denying that anything ever changes and believing that there is one solution to every problem.

As for calling the SPD lefty and portraying Angie as an american-style conservative, if your american, which I assume you are, didn't you notice that even the CDU/CSU and FDP are to the left of the U.S.'s democratic party on a vast majority of issues?
23:08 January 9, 2010 by Logic Guy
Well, perhaps we should look at governments and nations that are performing well, such as Denmark. There are intelligent people in Germany, America and other countries. Therefore, why can't they learn a few things from the Danes?

The truth is, at the moment, there simply aren't enough intelligent people in the world. This is the reason for all problems on our planet.

Efficient-Conservatism is the only thing that will ever bring stable and long term success.
01:01 January 10, 2010 by Talonx
Logic guy,

Not to clear on what you mean by intelligence; do you mean what people are born with or what they gain through education and upbringing (critical thinking and knowledge)?

Secondly, Denmark is pretty far left of center (if your an American anyway), I don't understand why you would applaud Denmark and taut 'efficient-conservatism' (whatever you mean by that).

Lastly, you need to define what you mean be 'stable', it is the case that some forms of stability are mutually exclusive with others. You should also define what you mean by 'success'; is this for govt, economy, society, the individual; because, again, some forms of success are mutually exclusive with others.
16:17 January 11, 2010 by amperrymd
Shouldn't we get back to tax policy which is what this article was about. Talonx, when Reagon reduced tax rates, US federal tax receipts increased dramatically. The same thing happened when Kennedy in the 60's reduced tax rates. "Social responsibility" is a nice feelgood phrase but it is not economic reality which is what we should be interested in.
19:28 January 12, 2010 by Talonx
By chance the same thing happened, especially considering that vast difference between their two sorts of cuts.

The problem is you cannot predict what tax rate cuts will bring into the federal govt. longterm or do to a society in general in the longterm, which is why it's not responsible (socially or generally).

But even if you could, the good of them is only marginal and though it may increase tax reciepts for a short time it does a number of other very horrible things. in the case of Reagan we could point out that his cuts were responsible for reducing the standard of living in the U.S. by increasing the distance between the haves and have-nots, leading to one of the worst private economies ever (just like under Bush's reductions), partially due to the rich hoarding, partially due to the rich not diversifying their extra cash but dumping it into a small few successful companies (which outcompeted only moderately successful companies, leading to increases in unemployment, for which the successful companies did anything but pick up the slack), and partially due to Reagan's govt doing very little in the way of improving federally funded social program (where'd all that money from the extra reciepts go anyways, maybe we should go ask people like Olliver North, some of the drug runners in central america, and some of our Iranian friends currently serving sentences in prison in Iran).

I'm pretty sure alot of Germans have made the smart decision on this one.

As for the earlier aside, I couldn't just let logic guy get away with his worthless unspeak.
22:45 January 15, 2010 by amperrymd
Can we also not predict the effects of tax rate increases. The Laffer theory is that money left in the private sector increases economic activity and benefits all, including government. Furthermore the American founding philosophy favors individual freedom and limited central government. The battle for strong vs weak central government has been a recurring theme from the time of the American constitutional convention and as the years have gone by the federal government has encroached more and more but the independent streak in America remains strong as I believe we will see in our next elections.

I don't know where the idea was derived about the American standard of living decreasing under Reagan but I don't believe it's true. I'd have to see your statistics. The variation in individual income has nothing to do with general standard of living if all are increasing in wealth which is absolutely true of the Reagan years.

In America at least, "the rich" are a moving target. A great number of low income persons are young and become higher income as they age. One statistic I saw is that the majority of those in the lowest third income are in the highest third 30 years later. Another statistic is that only 5% of those in the lowest quintile income in America remain at that level all their lives. Thus a snapshot picture of the population tells us little about how we're doing economically.

Perhaps people are less economically mobile in Germany. In America most are not content merely to live a placid life supported by government services but instead strive to do well, and yes, to become rich. I've not been to Germany but I know Italy quite well. Every time I visit my family I return home vowing to slow down and enjoy life but the spirit here always draws me back.
23:50 January 18, 2010 by Talonx
Increases were never discussed in this article or by me.

As for the Laffer 'theory' , it's actually not a theory but a hypothesis (unless you'd like to equate it to gravity and evolution).

A fallacy often commited in the field of politics and political claims in general is one of not correcting for rates, including rates. For example, people like to state that the U.S. has the most Nobel winners every year, only true if you don't factor in the population size. In the case of the Reagan years, most of the stats you're referencing are NOT CORRECTED FOR INFLATION. Once such a correction is made (as many have actually done) you'll see that their was a huge slowing in reciepts and in the economy in general. It's a matter of fact that if you look at people's incomes during this time period you'll see an overall decrease except for the wealthy few. It's somewhat odd that Reagan's economists (Laffer, for instance) never did this correction on their own data, but, nevertheless used the inflation corrections on past data in comparison to their own uncorrected data (this is called intellectual dishonesty in the statistical community as well as invalid).

As for your overall income figures, I think I've seen a similar analysis, and would agree with the way most of it was done, except that it assumes wealth is divided into even groupings, this would be akin to myself assuming that America can be divided up into even 3rds based on being anglo-saxon, african, and asian. Of course, this is not the case and were I to try and do this I would mask alot of things inherent to the true population.

As for economic mobility here in Germany, they are pretty well off. Their universities are in some places free and cheap where they aren't free, while at the same time recieving essentially equivalent funding to uni's in the states from the taxpayers at large (actually they produce more published research in the english journals than our uni's in the states, for less money). Free uni equals greater economic mobility. Additionally, their unemployment is currently below that of the U.S., efficient govt. help is available for this with low economic status (which include greater incentive measures and better funded employment offices with high standards for highering). Health care is never an issue, as an American attaining his masters degree in germany I recieve better health care services through their public program (for only 50 euro a month) than I could ever afford in the states (seniors and the handicapped get similar benefits in germany, by the way). Their private insurers aren't allowed to dictate upon preconditions or drop you at a moments notice either and of course it's common knowledge that overall most of Europes public healthcare programs end up spending less money for more healthcare than do private and public options in the states. All these things actually allow for greater economic mobility.
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