Majority Of Germans Oppose Further Tax Cuts, Survey Shows

by Ulrika Lomas, Tax-News.com, Brussels

12 January 2010

As the bitter dispute over the issue of further tax cuts continues to plague the ruling parties within the German coalition government, findings from a recent opinion poll reveal that the majority of Germans currently oppose the idea.

According to the survey, 58% of those questioned – from all political parties – rejected the idea of introducing further tax cuts in Germany from next year, and opposed plans to implement the EUR24bn tax cut proposals contained in the coalition agreement. Only 38% supported the government’s tax relief plans for 2011.

Even among supporters of the Free Democratic Party – a party determined to reform the country’s taxation – only 43% are in favour of implementing further tax reductions, whereas a majority of 53% are against the plans.

Interestingly, a clear link is evident between the individual’s own economic circumstances and how they reacted to the poll. For example, 49% of those surveyed, with a net income of less than EUR1,500 a month, were firmly in favour of further tax cuts (as compared to 45% against). In stark contrast, only 31% of individuals surveyed, with a net income of equal to or in excess of EUR3,000 per month, favoured lower taxes, while a staggering 69% were against.

The results reflect the current economic situation in Germany, and in particular the record state debt. Germans also fear that the financial crisis may well deteriorate over the coming months, leading to an increased burden on the state.

Only a matter of months after assuming office, the ongoing battle over key issues such as tax policy has plunged the new coalition government into a real crisis of confidence.

Indeed, only 51% of those interviewed were confident in the government’s ability to overcome the economic crisis, while an overwhelming 82% expressed the opinion that Chancellor Angela Merkel must urgently clarify the political direction of the government.

Two thirds considered that the coalition parties remain deeply divided, and criticized the lack of common direction.

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