Germany's Kauder Calls For Stock Market Sales Tax

by Ulrika Lomas, Tax-News.com, Brussels

05 January 2010

With Germany’s Christian Democratic Union (CDU) Party determined to offload at least some of the financial burden from the economic crisis onto the banks, party leader Volker Kauder has urged the Free Democratic Party (FDP) to agree to a stock market sales tax.

Volker Kauder has called for the Union’s coalition partner to fundamentally rethink its tax policy in the light of the economic crisis, and to finally relinquish its staunch opposition to the introduction of a financial transactions tax.

Kauder is adamant that the cost of the financial crisis must not be borne entirely by the public, and that lessons must be learned and any necessary changes made.

The introduction of a stock market sales tax, as also advocated by Chancellor Angela Merkel, would serve to make the country’s financial institutions more risk-aware, Kauder explained, and to encourage banks to adopt a more responsible approach.

Up until now, however, the FDP have vehemently rejected the idea of a transactions tax, fearing that small investors would also be affected.

Kauder’s remarks are yet another clear sign that the CDU and FDP remain bitterly divided over tax policy. While the FDP are insisting on the introduction of a second wave of tax relief measures to further stimulate growth and employment, leader of the Christian Social Union (CSU) Horst Seehofer has warned the FDP leadership against such exaggerated tax cut promises.

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