pre-election promise

The Christmas Gift that Wasn't

  • Why it matters

    Why it matters

    The tax cut is unlikely to give the economy the spending bounce that some of Germany’s neighbors might be hoping for.

  • Facts


    • A taxpayer on an average income is likely to be better off by around the price of a couple of cappuccinos a month.
    • Finance Minister Wolfgang Schäuble has also adjusted tax brackets to ensure that taxpayers will not suffer any so-called “creeping tax increases”.
    • A tax for nursing will increase by 0.2 percentage points next year in order to finance recent reforms to long-term care.
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Silvesterparty am Brandenburger Tor
Much ado about giveaways but folks are keeping it real. Source: DPA

It happens all over the world: the year before parliamentary elections, the parties in charge announce a round of tax cuts – or, at any rate, they at least claim to cut taxes.

Germany, which will in 2017 hold parliamentary elections to the Bundestag, is no exception. In a statement posted just before Christmas, the coalition government claimed that its budget for next year includes no less than €6.3 billion ($6.6 billion) in tax cuts.

The tax cuts, which will kick in from the beginning of the new year, amount to the largest reductions since former chancellor Gerhard Schröder, a moderate Social Democrat, in the early years of the last decade.

But that doesn’t mean they’ll be felt by the German public.

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