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Tax-Cut Time for Germany?

19 4 1

MUNICH – A weakening economy has rekindled an old debate: does Germany need tangible tax relief for its workforce and enterprises in order to remain internationally competitive? Or should taxes go up to provide more funds for social programs and public investment?

Mar 4, 2019 Emmanuel Macron calls on EU citizens to focus on three goals ahead of the critical European Parliament election in May.

Feb 27, 2019 Raghuram G. Rajan argues that beggar-thy-neighbor policies cannot solve the problems facing declining communities.

Feb 11, 2019 George Soros argues that the EU cannot be saved without transforming its political party systems.

Higher taxes create more room for government expenditure, while lower taxes limit the state’s spending capacity. The choice between these options is a political matter. But one general approach that might garner cross-party support in Germany would be to ensure that the share of economic output claimed by the public sector neither increases nor decreases over the medium term.

In fact, the ratio of taxes and social-security contributions to GDP in Germany has been increasing for years. A reference point for........

© Project Syndicate