tax policy

A Taxing Election Issue

  • Why it matters

    Why it matters

    Who wins the German election will have a significant impact on how much tax voters pay. The issue could give a lackluster campaign genuine edge in its final phases.

  • Facts

    Facts

    • After three successive years of budget surpluses and with ultra-low interest rates shrinking debt repayments, German parties can plausibly offer substantial tax cuts.
    • Both the center-left SPD and center-right CDU promise to reduce taxes, but differ on emphasis, with the CDU proposing cuts at every income level.
    • The Social Democrats’ are positioning themselves as the part of social justice. Their redistributive tax plans would benefit low and middle-earners, with tax rises for top earners.
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    Audio

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Martin Schulz und Angela Merkel
Martin Schulz has struggled to set his party apart from Angela Merkel’s CDU. Source: DPA

Germany’s election campaign is drifting quietly to a close. Unless events intervene — always a possibility — Chancellor Angela Merkel looks set to coast to a fourth term on September 24. The only real question looks to be the composition of her next coalition.

The big problem for Martin Schulz’s center-left Social Democratic Party, or SPD, has been differentiating itself from a chancellor who excels at stealing her opponents’ policies and their thunder.

One area where the Social Democrats could still carve out an identity is on tax policy, where there are genuine differences across the party spectrum. So far, the reluctance of some parties — above all, Ms. Merkel’s Christian Democrats, or CDU — to provide detailed figures has made teasing out those differences difficult.

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