Germany Gets It, Will Cut Tax Rates; When Will Obama Catch On?
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Merkel Pledges Tax Cuts Despite Rising Deficit
By ANDREA THOMAS
BERLIN—German Chancellor Angela Merkel defended her plan to cut taxes despite the country’s soaring budget deficit as she introduced her conservative alliance’s manifesto ahead of national elections in September.
Lower incomes taxes would “provide motivation” and encourage economic growth, Ms. Merkel told a conference of her party, the Christian Democratic Union, and its Bavarian sister party, the Christian Social Union.
“It would be wrong not to do what is right and necessary for growth, and so prevent ourselves emerging quickly from this crisis,” Ms. Merkel said in her conference speech.
The conservative parties’ election platform promises tax cuts worth €15 billion ($21 billion), but gives no time frame. The parties plan to cut the lowest income tax rate to 12% from 14% at present, raise the threshold for paying the top income tax rate of 42%, and reduce the degree to which a rising income leads to a progressively higher tax rate.
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Ms. Merkel has repeatedly ruled out the possibility of tax increases in the event she wins the election, saying the German economy wouldn’t be able to deal with the burden of higher taxes when it is struggling to regain some growth momentum.
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The essence of good financial management is to live within your means.
