election promises

Tax Cuts Left, Right and Center

Bundeskanzlerin Angela Merkel (l, CDU) und Bundesfinanzminister Wolfgang Schäuble (CDU) unterhalten sich am 17.07.2015 während der Sondersitzung des Deutschen Bundestags zu Griechenland-Hilfspaketen in Berlin. Der Bundestag entscheidet heute in einer Sondersitzung über Verhandlungen für neue Finanzhilfen für Griechenland. Foto: Bernd von Jutrczenka/dpa +++(c) dpa - Bildfunk+++
Talking taxes.
  • Why it matters

    Why it matters

    Germany has a budget surplus and with the general election a year away, some politicians are promising tax cuts.

  • Facts


    • Despite the influx of more than 1 million refugees last year, Germany has a budget surplus of €18.5 billion.
    • Germany’s next general election will likely take place in the last two weeks of September 2017 or the first two weeks of October.
    • The CDU may call for tax cuts that would reduce government revenue by €12 billion to €15 billion while the Social Democrats would prefer investment in education and research.
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The sound of conservative politicians clamoring for tax cuts is a sure sign that Germany is entering an electoral campaign.

The next general election will take place just over a year from now, in fall 2017. Last spring, Finance Minister Wolfgang Schäuble, a prominent member of Chancellor Merkel’s conservative Christian Democratic Union party, was the first to float the idea of tax relief after the election.

He suggested the state relinquish about €12 billion in annual tax revenue, roughly two-thirds of the budget surplus that Germany achieved last year.

A few other center-right politicians eagerly joined the discussion, with some coming up with significantly less conservative estimates, especially after the government statistics office announced last week that Germany recorded a higher-than-expected €18.5 billion budget surplus in the first half of 2016. CDU economists and representatives of the country’s robust network of mid-sized companies demanded the party include a €35 billion tax rebate in its electoral manifesto. The party is expected to announce a final decision at its party conference in December at the latest.

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