Germany's Rüttgers Rebels Against Govt Tax Cut Plans

by Ulrika Lomas, Tax-News.com, Brussels

09 February 2010

North Rhine-Westphalia’s Prime Minister, Jürgen Rüttgers, has expressed his fierce opposition to the tax cut plans of the German coalition government, three months ahead of the state elections.

Eager to raise his profile and to win all-important votes, Christian Democratic Union (CDU) party member Rüttgers has distanced himself from the finance policy of coalition partner, the Free Democratic Party (FDP), and threatened to veto the government’s proposed 2011 tax reform, if this is to result in an increased burden on municipalities.

Rüttgers defiantly announced that North Rhine-Westphalia will not agree to any measures that will lead to the closure of theatres and swimming pools in towns and communities, nor will he approve any initiatives that will serve to delay the expansion of nursery schools.

Emphasizing the fact that the welfare of the community is of greater importance than tax reductions, Rüttgers argued that in truth there is no scope to implement tax cuts, which are not guaranteed to create jobs anyway.

Rüttgers repeated his calls for the introduction of a stock market sales tax in Germany, stating that, if necessary, a levy must be implemented at national level. He also rejected the FDP’s plans to introduce a health premium, highlighting the fact that, given the lack of social balance, such a levy is unjust and would place too great a burden on many individuals.

Responding to the Rüttger’s criticisms, Deputy Prime Minister of North Rhine-Westphalia, Andreas Pinkwart (FDP), underlined the fact that a simpler, lower, fairer tax system is a key component of the coalition agreement, and that efforts should be made to create scope to implement fair taxes.

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