Consumers braced for Merkel's tax rises [Germany raises taxes to "boost" the economy.]

telegraph.co.uk ^ | May 20, 2006 | Kate Connolly

[grundle]

German consumers were bracing themselves yesterday for the highest tax increase since the Second World War after parliament voted in favour of a controversial rise in VAT aimed at boosting the country's struggling economy.

Experts were divided yesterday on whether the three-point rise in value added tax to 19 per cent would improve Germany's economic fortunes, or put the brakes on the signs of a recovery.

The increase, which is due to come into effect in January, is the most significant reform to have been passed by the seven-month-old coalition government of Chancellor Angela Merkel.

Her Christian Democratic Union and its partners, the Social Democrats, who together have a 166-seat majority, easily won the Bundestag vote, which will leave consumers and companies carrying an extra tax burden estimated to be around £13 billion.

The changes affect not only consumer goods but also petrol, savings and insurance premiums. A commuters' tax break is to be reduced drastically.

The increases were attacked yesterday by both industry - which said the rises would halt the start of Germany's recovery - and consumer groups, who argued that the increased taxes would drive increasing numbers of Germans into poverty.

[globalheater]

Merkel herself is no liberal (means pro free-economy in europe).

Cite : " Saving (money) hurts !"

Spending is not the same as saving Mrs. Merkel. It's the opposite.

Why did she sacrifice 'her' tax expert ? Maybe because he's to close to the Wulf, März line (our 'neocons') - just a thought.

That is exactly what she learned in adlershof - to trip up stoiber, wulf, märz and others and that's why she is where she is.

[Michael81Dus]

Merkel is very liberal. She hasn´t changed her views on the economy, on freedom. It´s just that she´s the German shepherd among black and white sheep. Someone has to keep the gone-wild group together. That´s unfortunately her job, she relies on both - the black and the white sheep.

It wasn´t her decision to drop Prof. Kirchhof, it was the people´s decision. The people aren´t prepared for freedom, that was the outcome of our last election. They had the choice, and a majority voted for a "change without much change". In the end, only a few members of the government were replaced, but we still follow the old track. It´s a pity.

If elections were held today, someone must prevent me from voting FDP - or I would do so! It´s not a coincidence that the FDP is at 13% in polls right now. It´s not a coincidence that the CDU/CSU is at 35%.

[globalheater]

I will NOT be so stupid to prevent you from voting FDP.

Kirchhof was sacrificed. He was pushed to the public as polls went bye bye - he and his ideas where defaced and ridiculed as was expected and then dropped to bin the SPD campaing tactics.

Hell, she made him stand for 2 opposing concepts. She wouldn't have done that to somebody she needed in an exposed office afterwards.

He has certainly choosen to go into that kitchen and didn't complain about the heat afterwards.

[expatpat]

I thnk everyone is in a little bit of $hit. The Chinese situation is unenviable, same in Russia and S. America. I guess the French are in some of the deepest.