Economic Advisors Dictate German Chancellor's Election Campaign

by Ulrika Lomas, Tax-News.com, Brussels

29 April 2009

Deeply dissatisfied with the clear lack of vision and direction currently displayed by the German Chancellor and Christian Democratic Union (CDU) leader Angela Merkel, the party’s team of economic advisors has decided to steer its own election course for the party, presenting a comprehensive election programme detailing radical tax cuts, as well as measures designed to eradicate the country’s spiralling record debt.

Determined to force Merkel’s hand, and to map out a clear political path for the party in the election battle, the Chancellor’s advisors and internal critics are eager to disassociate the CDU party from their political rivals the Social Democrats (SPD).

Among the team’s demands, laid out in the election programme, are pledges to abolish inheritance tax, as well as to remove the unpopular and burdensome solidarity tax currently levied on both personal and corporate income. Keen to further reduce the pressure on middle-income earners, the advisors have also stipulated that the rise in income tax bands will be reversed following the September election, and thereafter regularly brought into line with inflation.

If implemented, the economic team’s ambitious tax plans would cost the country around EUR20bn.

In stark contrast, the SPD are promising in their election campaign to introduce a wealth tax for top earners, together with a stock market sales tax on stocks and shares. It also pledges to reduce the burden faced by those on low income.

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