• Germany's news in English

Merkel's party mutinies over tax cuts

DPA/The Local · 1 Aug 2014, 14:04

Published: 01 Aug 2014 14:04 GMT+02:00

Facebook Twitter Google+ reddit

The workers' wing of Merkel's Christian Democrats (CDU) added its voice to growing calls for urgent measures to slow down so-called cold progression.

The process, also known as "bracket creep" and often described as a "secret tax hike", occurs when taxes rise faster than income in real terms, as tax rate thresholds do not take account of inflation.

The rebels have called for the government to act during this parliament to ease the burden on taxpayers, just over a week after new figures showed German workers were paying record amounts in tax.

On Thursday, the economic wing of CDU called for a new tax system in which the rate thresholds would be automatically adjusted annually to take inflation into account.

Merkel made clear before parliament broke for summer that she had no plans to change tax rules. There was said there was "no room for manoeuvre in fiscal planning, also not in the area of tackling cold progression".

Rebellion in the ranks

Ruling junior coalition partner the Social Democrats (SPD), a centre-left party traditionally in favour of raising taxes, also said on Friday they would join the CDU rebels in calling for a fight against cold progression - as long as the government would continue to receive the same amount in tax revenue.

The SPD offered to enter urgent talks with the CDU/CSU on the issue, said Johannes Kahrs, the Social Democrat's parliamentary spokesman on budgetary policy.

Meanwhile, the CDU's workers' wing (CDA) has said it plans to draw up a joint proposal with the party's Mittelstand representatives - small and medium-sized businesses - for discussion at the party conference in December.

Story continues below…

"The secret tax hikes are a burden on our workers," CDA head Karl-Josef Laumann told the Rheinische Post on Friday, but he added he did not want tax cuts to lead to a loss of government revenue.

One suggestion the CDA has put forward to make up any budget shortfall caused by tax cuts for the lower paid was to raise taxes on those who earn over €250,000 a year from 45 percent to 49 percent, Handelsblatt reported on Friday.

SEE ALSO: Conservatives: We'll lower taxes too

For more news from Germany, join us on Facebook and Twitter.

DPA/The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Munich to get 'nice toilets' to serve cross-legged locals
Photo: DPA

The Bavarian capital has a pee problem - the city only has one public toilet for every 13,000 inhabitants. But a new plan could rescue desperate locals, the Süddeutsche Zeitung reports.

German kids get glowing report for their English skills
Photo: DPA.

As if multilingual Germans don't already put many English-speakers to shame, now the younger generation is improving their English skills even more.

Berlin museum controversially recreates Hitler bunker
The reconstruction of the Hitler bunker. Photo: DPA

Sensationalized or compelling history? Berlin museums clash over new Nazi bunker exhibit

Germans think they're fit, but they're really couch potatoes
Photo: DPA.

There's been an increase in the number of Germans who define themselves as "fit", but their lifestyle choices don't quite match this self-perception.

10 fascinating facts you never knew about German beer
Tennis coach Boris Becker and his wife Lilly at Oktoberfest 2016 in Munich. Photo: DPA

From malt and monks to Radlers and rivalries, the story of German beer is as rich and wonderful as its selection.

Intensive farming 'endangers a third of German species'
Photo: DPA

There are 32,000 species of animal, plant and mushroom life native to Germany. Due to intensive farming methods, one in every three of these is endangered, a new report shows.

German hospital uses therapy to 'treat' paedophiles
A poster from the campaigne "Don't offend", which offers therapy to paedophiles. The sign reads "Do you love kids more than you'd prefer? There's help." Photo: DB Scholz & Friends / DPA.

A unique German initiative is offering therapy to paedophiles to control their urges, with the aim of getting them help before they offend.

Minister: 'no tolerance' for clowns after chainsaw attack
Photo: DPA

Interior Minister Thomas de Maizière has called for a zero-tolerance approach to 'killer clowns' after a series of attacks culminating in two teenagers being chased by a clown wielding a chainsaw.

Baby who was auctioned on eBay taken away from father
Photo: DPA.

A German court ruled on Thursday that a man who put his one-month-old baby up for sale on the online auction platform eBay should only be allowed contact with the child under supervision.

Portugal's ruling party calls German minister 'pyromaniac'
Finance Minister Wolfgang Schäuble. Photo: DPA.

The head of Portugal's ruling Socialists called German Finance Minister Wolfgang Schäuble a "pyromaniac" on Thursday after he criticized Lisbon for reversing course on austerity.

10 German clichés that foreigners get very wrong
Sponsored Article
Last chance to vote absentee in the US elections
10 ways German completely messes up your English
Germany's 10 most weird and wonderful landmarks
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
jobs available
Toytown Germany
Germany's English-speaking crowd