Germany: Schäuble moots hiking 'solidarity' tax to help rescue budget

The Local (Germany) ^ | 06/03/10

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Schäuble moots hiking 'solidarity' tax to help rescue budget

Published: 3 Jun 10 18:32 CET

Online: http://www.thelocal.de/money/20100603-27631.html

As the German government scrambles to rein in the ballooning deficit, Finance Minister Wolfgang Schäuble has reportedly proposed a hike in so-called 'solidarity' surcharge - the unpopular reunification tax.

In one of the more surprising ideas being thrown about, Schäuble stunned his senior colleagues by suggesting raising the Soli surcharge from the present 5.5 percent of a worker’s income tax to 8 percent, the Financial Times Deutschland reported Thursday.

The solidarity surcharge was set up nearly 20 years ago to pay for the revival of the moribund former communist eastern states. In recent years there have been growing calls to scrap it altogether.

But in the midst of Germany's worst modern budget crisis, all ideas are on the table as the government prepares to squeeze savings and boost revenue wherever it can. other ideas include a hike in tobacco tax, a new fuel tax for electricity generated by nuclear power could be introduced, and a surcharge on airline tickets.

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I suppose it would hold off Germany going over the edge for a few months, when it is said and done.

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P!