Majority of Germans against Merkel’s tax cuts

The majority of Germans are against the new centre-right coalition’s latest tax cuts, a poll released by public broadcaster ARD on Friday revealed.

Majority of Germans against Merkel's tax cuts
Photo: DPA

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.

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.

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German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.


With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.