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Germany's CDU Party Calls For Corporate Tax Cut

Monday, January 21, 2019

Annegret Kramp-Karrenbauer, chair of the German Christian Democrat Union (CDU), has said that the Government should consider cutting corporate tax to help stave off a slowdown in the economy.

"We need to consider how we can strengthen the domestic economy and our competitive situation, for example by reducing the tax burden on companies through a corporate tax reform," Kramp-Karrenbauer told the Welt am Sonntag newspaper.

The CDU chairwoman argued that corporate tax cuts should be enacted soon, rather than – as has been proposed by Finance Minister Olaf Scholz – in the event of a slowing economy.

Kramp-Karrenbauer also pressed the case for the abolition of the the solidarity tax, a 5.5 percent surtax on both corporate and individual income, used to fund economic development in former East Germany.

Kramp-Karrenbauer's comments were similar to those made by Economy Minister Peter Altmaier to the same publication in November 2018, when he said that the German Government should seek to reduce the level of taxation, including the rate of corporate tax, to boost the economy and maintain Germany's competitiveness.

"Corporate tax is now higher in Germany than in other large industrialized countries such as the USA, Great Britain and, soon, France. This is a disadvantage and puts jobs at risk. Therefore, a reduction in the medium term is necessary," he said.

However, the Social Democrats, which is part of a coalition with the CDU, are opposed to corporate tax cuts, and are in favor of retaining the solidarity tax for those on high incomes.