Germany proposes US$10B tax cuts to ease inflation pain

BERLIN –

Germany’s finance Minister said Wednesday saw the announcement that the government would make tax cuts in excess of 10 Billion Euros (US$10.2 Billion), to benefit large sections of the population, who have been hit hard by rising energy prices and inflation.

Christian Lindner, Finance Minister said Changes to Germany’s tax system that prevents them from being taxed higher than their wages would benefit approximately 48 million Germans.

He also stated that child benefits will be increased in the future. said.

The Greens, who form part of a coalition consisting of Lindner’s probusiness Free Democrats and three other parties in Germany, have criticized the plan. Their representatives noted that those with high incomes will enjoy the largest absolute gains from the tax cuts proposed, while those with lower incomes will save significantly.

However, Chancellor Olaf Scholz from the Social Democrats supported the plan.

Scholz’s spokesman, Steffen Hebestreit, said The tax cuts were part of a number of measures to combat high energy prices and inflation. He stated, “As such, I would say that there’s general goodness on the part of chancellor on the question too.” said.

Germany’s powerful industry lobby organization BDI also supported the plan. They said it was important not to increase pay and cause “hidden tax increases” for skilled workers.

Official data shows that July saw inflation drop to 7.5% from 7.6% in June, and a slightly lower 7.5% to 7.5% this month. A sharp rise in energy costs due to Russia’s attack on Ukraine has driven price increases.