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Merkel's CDU Slams Opposition's Wealth Tax Plans

Wednesday, 26 June 2013   (0 Comments)
Posted by: Author: Ulrika Lomas
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Author: Ulrika Lomas

German Chancellor Angela Merkel's ruling Christian Democratic Union (CDU) party has unveiled its 2013-2017 election manifesto, in which the party categorically rules out the idea of either raising taxes or re-introducing a wealth tax in Germany.

Underlining the need to maintain solid finances, and to ensure growth, thereby increasing fiscal revenues, the CDU insists that taxes should not rise as advocated by Germany's red-green Opposition parties. Instead, it is imperative to spend wisely, and to adhere firmly to the country's debt brake rule enshrined in basic law, to progressively reduce new debt, the party argues.

Defending Germany's progressive tax system, the CDU warns against any changes, making clear that higher income earners must bear more of the fiscal burden than modest and low-income taxpayers. This is the case currently, the CDU stresses, noting that in 2011, the top 5 percent of taxpayers shouldered 41.5 percent of the income tax burden, while the upper 25 percent bore 76.9 percent of the income tax burden. Any party seeking to over-tighten the fiscal screw, merely risks endangering stability and de-motivating individuals, however, the party emphasizes.

According to the CDU, businesses in Germany would be most affected by the Opposition's wealth and inheritance tax plans, in particular medium-sized companies with large businesses assets. Such plans will merely limit scope for corporate investment, threaten jobs, and endanger the competitiveness of Germany as a business location, the party warns.

On the issue of corporation tax, the CDU highlights its commitment to ensuring that the tax is conducive to growth and to guaranteeing that Germany remains an attractive location for industry. The party is continuing its efforts to align corporation taxes in Europe, it adds.

Finally, alluding to its determination to clamp down on tax evasion, the CDU pledges, if elected, to continue to actively combat, alongside France and the UK, the aggressive tax planning and tax avoidance of large multinationals, to ensure that taxes due in Germany are paid. In addition, discussions are currently ongoing as to whether to further tighten the voluntary declaration provisions, enabling German residents with undeclared assets held abroad to regularize their accounts, the party adds.

Concluding, the party underlines its commitment to ensuring strict rules for the financial markets, to guarantee that all products and actors are regulated, and to introducing a Financial Transactions Tax (FTT) in Europe, within the framework of enhanced cooperation. The long-term objective is global FTT implementation, the party ends.



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