Eichel seeks to push through corporate tax cuts

2nd June 2005, Comments 0 comments

2 June 2005, BERLIN - German finance minister Hans Eichel on Thursday called on parliament to back a government bill for corporate tax cuts in advance of early national elections expected this autumn.

2 June 2005

BERLIN - German finance minister Hans Eichel on Thursday called on parliament to back a government bill for corporate tax cuts in advance of early national elections expected this autumn.

Eichel wants to cut corporate tax rates to 19 percent from the current 25 percent under a deal hammered out earlier this year between Chancellor Gerhard Schroeder and the conservative opposition which controls parliament's upper chamber.

The move would lead to a EUR 6.5 billion revenue shortfall for the state, said Eichel.

Eichel insisted that cutting German corporate tax rates was the only way to counter harmful European tax competition.

"We cannot eliminate it with complex control mechanisms," he said.

Leftist members of Schroeder's Social Democrats (SPD) strongly oppose any corporate tax cuts and are demanding the party campaign for re-election with a pledge of big tax increases for the rich.

"Why shouldn't the super-rich pay more?" said Sigrid Skarpelis- Sperk, a leading SPD leftist and internal party enemy of Chancellor Schroeder.

Schroeder called for early elections after the SPD was badly defeated in a key 22 May regional vote in part because he feared the leftists in his own party planned to torpedo further reforms.

The opposition Christian Democratic alliance (CDU/CSU) and their Free Democratic (FDP) ally are currently polling 53 percent, compared to 37 percent for Schroeder's ruling SPD-Greens coalition.

DPA

Subject: German news

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