Kansas City Star
Quote:
German Leader to Speed Up Tax Cuts
STEPHEN GRAHAM
Associated Press
BERLIN - Chancellor Gerhard Schroeder on Sunday announced plans for a euro25 billion ($28.5 billion) tax cut next year to send a "signal of revival" to Germans unsettled by cuts to the nation's generous welfare state.
"Reforms sometimes hurt, but they also pay off," Schroeder said after his Cabinet approved the move during a three-day retreat at an 18th-century manor house outside the capital.
Schroeder is turning to tax cuts in the hope of bolstering weak growth. Germany's economy is in its third year of near-zero growth, and actually shrank 0.2 percent in the first quarter, helping to push unemployment to over 10 percent.
Schroeder said the tax proposal, which would see the final step of a 2001-2005 tax relief plan combined with a euro7 billion ($8 billion) cut already slated for Jan. 1 next year, would be a welcome boost for the economy, which the government hopes will expand by 2 percent next year.
Schroeder has already announced cuts in jobless benefits and health care programs jointly financed by firms and workers, a move supposed to leave companies with more funds for investment. His center-left government is also cutting red-tape that makes it hard for firms to fire staff. Industry says the restrictions makes them reluctant to hire in the first place.
The tax cuts, which also benefit small businesses, would reduce the top rate of income tax from 48.5 to 42 percent and the bottom rate from 19.9 percent to 15 percent
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Hey, if
Schroeder can get it right, why can't the Democrats? [img]graemlins/stunned.gif[/img]
For running on an anti-American platform, he's sure acting like one.