This year will be the third straight time that German Finance Minister Wolfgang Schäuble has presented a balanced budget. As a result, he will go down in the history books as one of the Germany’s most successful finance ministers. And in contrast to many of his predecessors, Mr. Schäuble has managed to ward off the largest fiscal favors requested by his fellow cabinet members.
But now it really is time to give the taxpayers back some of their hard-earned cash. Ever the smart saver, Mr. Schäuble realizes this and is holding out to taxpayers the prospect of €15 billion ($16.2 billion) in tax relief. But when such a penny-pinching calculator like our finance minister is willing to pay out €15 billion, then there’s definitely more in the coffers, and perhaps twice as much spare. You don’t have to be the party chairman of the Free Democrats to have reached that conclusion.
Fiscal policymakers know that any truly sensible income tax reform must involve at least 1 percent of a country’s gross domestic product. So that would be about €30 billion. That kind of money could stimulate the economy. But above all, it would realign the balance between the state and the private sector.