The news comes just a day after it emerged that Merkel's junior coalition partner, the pro-business FDP, wants to cut the “solidarity tax,” imposed more than 20 years ago to cover the costs of reunification and economic development in the former East Germany.
The common platform of cutting taxes is in stark opposition to the policies espoused by the centre-left SDP party and the Greens, who are planning to raise taxes.
The CDU's apparent reason for lowering taxes is to relieve tax-payers of the effects of so-called “cold progression,” when taxes rise faster than real-term incomes because revenue thresholds are not adjusted for inflation.
A previous attempt by the government to curb the effect was blocked by the SPDs and Greens in the Bundesrat.
Despite their pledge to lower taxes, Merkel and CSU leader Horst Seehofer have vowed to make balancing the budget a priority.