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No tax cuts, Merkel says

The Local · 3 Nov 2010, 08:15

Published: 03 Nov 2010 08:15 GMT+01:00

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In an interview with daily Ruhr Nachrichten, the chancellor said there would be no tax relief in the near future.

“Budget consolidation takes priority,” she told the Dortmund paper. “The pleasing economic development won’t encourage us to spend more money, but instead will mean that we take on less debt than originally planned.”

But as promised by the centre-right coalition of her conservative Christian Democrats and the pro-business Free Democrats, the government would soon take the first steps toward simplifying the German tax system, she said.

“The resulting shortfall, some €500 million, will be taken on completely by the federal government,” she insured, addressing concerns from cash-strapped cities and municipalities.

The chancellor cited one of her coalition’s proposals for the simplification – making tax returns due every two years instead of annually. Merkel said many citizens would find this a relief.

She also spoke indirectly in favour of higher wages in Germany.

Story continues below…

“If businesses now see room for positive wage development, then I think this is good in light of domestic economic trends,” she told the paper, warning that the situation was not the same for all sectors and would need to be negotiated by unions.


The Local (news@thelocal.de)

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Your comments about this article

09:37 November 3, 2010 by marimay
Yes, we have to keep paying for Greece or they will send you more bombs!
11:42 November 3, 2010 by Aschaffenburgboy
But then we have to pay more on health insurance soon, and VAT will be at 59%.... win:win:lose:win:lose:lose:
12:48 November 3, 2010 by Portnoy
There's a word for what you guys are talking about, it's called: inflation.
12:55 November 3, 2010 by William Thirteen
simplifying the tax system would indeed be a relief - but may be opposed by the legions of tax preparers for whom the complicated system is a money making opportunity.
13:31 November 3, 2010 by Der Grenadier aus Aachen
I'm definitely with Merkel on this one. We need to clear our 1.something trillion in debt and wait until we've actually not a national surplus again, before we start talking about tax reductions. You can't be a German taxpayer only in the good times; you need to buckle down in the tough times, too, and work hard to protect the affluence of our republic. Every year that we delay means untold billions in interest, that we could really have gone without. We can, and should, clear this debt in the next ten years.

I just hope that is a strength of character that we still possess.
06:12 November 4, 2010 by Bushdiver
@ Der Grenadier our money aus Aachen......It's people like you that make everyone bend over and take it up the butt. Maybe you are not concerned about tax reductions but many of us are. You must be a Government employee. To be perfectly honest, if the country had no debt at all there still wouldn't be any tax cuts. In any case, maybe you should donate some of your money so the budget gets balanced quicker.
15:24 November 4, 2010 by Der Grenadier aus Aachen

Actually, I'm a VP at a small bespoke software development company. And, I do. I paid around 35.000,00 in taxes last year. I also gave 5.000,00 to charity.

And before you go painting me with the elitism brush, you should know that I clawed my way up. I don't even have a college degree of any sort. Pure talent and hard work got me there. So, don't give me this "taking our money" non-sense.
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