The Social Democratic Party (SDP) parliamentary leader and former chancellor candidate Frank-Walter Steinmeier told daily Bild’s Monday edition that Merkel’s Christian Democratic Union (CDU) was going to send the country into debt in a “brazen” effort to help the FDP.
“Chancellor Merkel should ask herself why her own CDU premiers are against it. Probably it would be because they smell a rat, because a mini tax-break is to be financed with billions in new debt that only has one goal: to help the FDP get back on its feet. That’s not tax reform but electoral assistance with tax money. That is really brazen.”
Various media reports over the past week have said Merkel has promised her junior coalition partners that she will announce “mini-tax cuts” next month that are widely seen as necessary to give much-needed shot in the arm for the FDP, for whom lower taxes are a totemic issue.
However a broad spectrum of voices have come out against the cuts, including from the conservative side, right up to Finance Minister Wolfgang Schäuble. These voices were joined on Monday by Thuringia’s CDU premier Christine Lieberknecht, who said there were more important priorities now for Germany.
“I don’t see any room at all to have that debate again now, with all the projects we have.”
She said balancing the budget, investing in education and the reform of energy were all much more important now than tax cuts.
According to recent reports, Merkel’s centre-right coalition plans to announce next month its intention to lower the burden on taxpayers by up to €10 billion.
The business daily the Financial Times Deutschland reported that Merkel had agreed to the tax cuts as a concession to the new leader of the Free Democrats, Economy Minister Philipp Rösler. The FDP has long pushed for lower taxes and is currently wallowing at all-time lows in opinion polls.
The cuts will reportedly be targeted to help the middle class and small to mid-sized businesses known as the Mittelstand and could take effect just before the 2013 election.