No German Thatcher (or German Reagan)
Merkel changing her tune on taxes (Judy Dempsey, International Herald Tribune)
BERLIN Eight months into her term as chancellor, Angela Merkel is on the verge of raising taxes for the second time, in this case for a vast and bureaucratic health care system.
The proposal by her coalition of conservatives and Social Democrats envisions an expansion of the system to cover children that could cost taxpayers from €16 billion to €25 billion, or $20 billion to $31 billion.
[snip]
Merkel is already under fire from the business community for doing little on the reform front, and the costly new program will force her to decide how to pay for it. One choice is some kind of indirect tax, such as the value-added or sales tax; another is to raise the income tax.
Either measure is sure to be unpopular, particularly since Merkel has barely weathered the storm over raising the sales tax from 16 percent to 19 percent, an increase that takes effect next January. Economists have attacked this tax, saying it would do nothing to encourage consumer spending and thus to cut the unemployment rate of 11 percent.
Merkel came to office promising to cut taxes, reduce bureaucracy, and encourage competition and transparency.
There was a time when many analysts referred to Merkel as a "German Thatcher" or a "German Reagan."
Those comparisons can stop now.
Posted by Kevin Whited @ 06/28/06 12:57 | International | Technorati
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