Cutting Taxes to Spur Economic Growth: German Voters Say Ja!

By September 27, 2009Taxation

From Pajamas Media, “Germany Swings to the Center-Right

During the campaign, Merkel repeatedly stressed that she wanted to govern with the business-friendly FDP, which has been out of power since 1998, in order to cut taxes in a bid to further revitalize a German economy that has been hit hard by the global recession.

And, indeed, the results (from Der Spiegel) put the Free Democratic Party, the strongest advocate of business and tax relief, jumping from 9.8 percent in 2005 to 14.6 percent today. The CDU slips a little, but its ruling partner, the Social Democrats, plummets from 34.2 to 23.1 percent.

Bundestagswahl 2009
Partei ARD ZDF 2005
CDU/CSU 33,8 % 33,8 % 35,2 %
SPD 23,1 % 23,1 % 34,2 %
FDP 14,6 % 14,5 % 9,8 %
Linke 11,9 % 12,5 % 8,7 %
Grüne 10,6 % 10,1 % 8,1 %
Sonstige 6,0 % 6,0 % 4,0 %
ARD-Hochrechnung 22:04 Uhr, ZDF-Hochrechnung 21:46 Uhr

* ARD and ZDF are the major national TV networks.

UDPATE (5 p.m.): From The Times of London, “Merkel Unleashed.”

Having established her political authority, she now has an unparalleled chance to carry out those reforms that have for years eluded both the SPD and the grand coalition. The first is to streamline Germany’s economy to bolster its emergence from recession and allow it again to capture lost export markets. She is helped by having as a new ally the FDP, the main winners from this election. This business-orientated party, strongly supporting market economics, will back CDU proposals for a small tax cut, for further reforms to lessen the cost to employers of labour and for more savings in the generous social security system. Some changes have been made in the past four years, but the SPD was a brake on changes that the recovering economy now make more urgent and less controversial.

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