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Boom pours tax money into treasuries

The Local · 18 Apr 2011, 12:15

Published: 18 Apr 2011 12:15 GMT+02:00

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Business daily Handelsblatt, citing government sources, reported that federal and state tax income is soaring – a fact that could fuel renewed calls for tax cuts. Similar growth in tax receipts has not happened since 2007, when the sales tax was raised three percentage points.

In the first quarter, not even counting local taxes – which are collected separately – treasuries took in €12 billion more than in the first three months of 2010.

Nearly all the relevant taxes boomed in March, Handelsblatt reported. Corporate tax revenue climbed nearly 50 percent because of soaring profits. Income tax and sales tax receipts also rose strongly.

The windfall could drive renewed efforts by the pro-business Free Democratic Party – Chancellor Angela Merkel's junior coalition partner – for tax cuts and tax reform. The ailing party has suffered in the wake of the financial crisis because the pressure on government finances has left it unable to pursue its totem issue of tax cuts.

FDP party chairman Guido Westerwelle was last week forced to step down amid woeful state election performances and poor national poll results.

“If growth and consolidation continues this way, I see a prospect for tax relief in 2012 or 2013,” the party’s state chief in North Rhine-Westphalia, Daniel Bahr said. “We have to achieve a fair rate, so that an average earner keeps more than half a pay rise.”

Stabilizing the budget and the euro currency took precedence, however, Bahr said.

Story continues below…

The anointed new FDP chief, Philipp Rösler, has also raised the issue of tax relief in recent days, though he has not given a time frame.

The Local/djw

The Local (news@thelocal.de)

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Your comments about this article

12:36 April 18, 2011 by tallady
Super! Hopefully we can put that nasty toll business to bed.
13:13 April 18, 2011 by fatherknowsbest
Lets hear no more bellyaching about the cost of social programs in Germany. And the kids need all the help they can get in these confusing times.
16:03 April 19, 2011 by William Thirteen
nice tiltshift work on the title pic!
15:22 April 20, 2011 by jameswoolley
Could they not aleviate Europes problems by buying some land?

There could be a reshuffle, France could take Ireland/Portugal and German could have the Rhineland as a makeshift .... hold on a minute
09:26 April 22, 2011 by catjones
I'm begging you...please 'pour' some of that money into swimming pools.
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