German Economic Institutes Call For Tax Cuts
17 April 2017
A group of economic institutes in Germany has said it is high time the Government began reducing the tax burden, which is on an "upward trend."
Germany's five leading economic research institutions noted in their joint
spring economic forecast to the Government that the German economy is in its
fifth year of moderate growth. However, they suggested that Germany's high and
rising tax burden could stifle investment in the years ahead.
"Tax revenues in relation to gross domestic product now exceed 40 percent
and will continue to rise, partly due to progressive income taxation,"
the institutes said.
"It is high time that economic policy puts its focus on the long term,
limits the increase in the tax burden, and strengthens investment expenditures,
especially in education, through budgetary shifts," they added.
Despite the presence of a budget surplus, the German Government has consistently
resisted calls for major tax cuts, favoring instead a policy of fiscal responsibility.
While Finance Minister Wolfgang Schauble recently suggested that tax cuts would
be delivered after September's election in form of adjustments to income tax
thresholds, he poured cold water on the idea of more comprehensive tax by say
that the Government would not have "unlimited leeway" to cut taxes.
It is the Government's policy to continue running balanced budgets until at
least 2020, he said.