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Merkel Urges Tax Cuts to Boost German Economy
Chancellor Angela Merkel said on Tuesday Germany needs to stimulate domestic economic demand and urged opposition parties to stop blocking proposed tax cuts in the upper house of Parliament.
Merkel told business leaders Germany should end the automatic progression of workers into ever higher tax brackets due to inflation, which siphons more than 20 billion euros ($26 billion) out of the economy each year. She also renewed her calls for cuts in pension contributions as another way to boost purchasing power.
“Growth in Germany can at the moment be stimulated by an increase in domestic demand more than anything else,” she said.
Germany has come under pressure to boost domestic demand to relieve pressure on the euro zone’s struggling periphery during the sovereign debt crisis.
Merkel has also encouraged German firms to give their employees higher wage increases this year.
The battle over whether to cut taxes is also shaping up into a key issue ahead of next year’s federal election, where Merkel will be seeking a third term.
In Germany’s tax code, “bracket creep” generates billions of euros in revenues for the treasury because tax brackets are not adjusted for inflation.
The system has not been changed since 1958 and the state took in an extra 76 billion euros from 2005 to 2010. It has been taking in about 22 billion euros a year since 2010.
Bad Brad
October 17th, 2012
Well, there goes their gas prices.
Maudie N Mandeville
October 17th, 2012
KENNEDY: When consumers purchase more goods, plants use more of their capacity, men are hired instead of laid off, investment increases, and profits are high. Corporate tax rates must also be cut to increase incentives and the availability of investment capital. The government has already taken major steps this year to reduce business tax liability and to stimulate the modernization, replacement, and expansion of our productive plant and equipment.
KENNEDY: Our true choice is not between tax reduction on the one hand and the avoidance of large federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget, just as it will never produce enough jobs or enough profits. Surely the lesson of the last decade is that budget deficits are not caused by wild-eyed spenders, but by slow economic growth and periodic recessions, and any new recession would break all deficit records. In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low. And the soundest way to raise the revenues in the long run is to cut the rates now.
Jimmy C Corn
October 17th, 2012
Clearly, this monster is a racist.
FreeMan & Sarah Voting Early & Often
October 17th, 2012
It works everytime it is tried.
Lowell
October 17th, 2012
“ever higher tax brackets due to inflation, which siphons more than 20 billion euros ($26 billion) out of the economy each year”
Siphons to whom?
Obaminous
October 17th, 2012
well… she was for multi-culti before she was against it, but she does seem to comprehend this concept, thankfully
Ya sure
October 17th, 2012
Now don’t that smile and wave seem to say “Hey Barky, AMF !”
Nutjob
October 17th, 2012
This is what one does when their intention is to NOT destroy and collapse an economy unlike Greece, Spain and soon to be France and america should Barry get a 2nd term.