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Traffic light coalition: Economists are cautiously positive about plans

2021-10-15T14:57:36.717Z

The exploratory paper of a possible traffic light coalition provides for a number of economic promises. Experts praise the foresight in terms of content - but criticize the lack of funding.



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Traffic light negotiator after talks: "No new substance taxes"

Photo: CLEMENS BILAN / EPA

Germany's top economists see good approaches in the exploratory paper by the SPD, Greens and FDP. If a government were to be formed, the parties had agreed, among other things, to raise the minimum wage to twelve euros, to bring the coal phase out "ideally" to 2030 and to introduce "no new taxes on assets". Taxes such as income tax, corporate tax or VAT would therefore not be increased in a traffic light coalition. Hartz IV should be replaced by a »citizen's money«.

Marcel Fratzscher, President of the German Institute for Economic Research (DIW), sees the twelve-page paper as a promising first step.

"It is characterized by a great balance between economic goals, social security and international responsibility," said Fratzscher.

The promise to make this decade a “decade of future investments” and modernization is wise and ambitious.

The devil, however, lies in the details: "Because it has to be clarified how significantly more future investments can be made without tax increases and in compliance with the debt brake," said Fratzscher.

Doubts about funding

Jörg Krämer, chief economist at Commerzbank, is also not sure how the possible coalition partners will pay for their ambitious plans.

"It is questionable how the three parties want to spend significantly more on investments without reducing social spending, increasing taxes or loosening the debt brake," said Kramer.

The three parties had previously agreed to implement all measures taking into account the debt brake.

However, this should succeed without tax increases.

In a number of places, on the contrary, relief is planned, for example through cheap »super depreciation for climate protection investments«.

There will be no revival of the wealth tax either.

The financing will therefore "not be enough for the foreseeable future," said Jens Südekum, head of the Düsseldorf Institute for Competitive Economics, and the coalition will have to make maximum use of the flexibility of the debt brake.

Südekum also sees room for maneuver when it comes to tax increases: "Between the lines you can clearly see that an increase in inheritance tax can continue, because the coalition is only ruling out the introduction of new property taxes," said the economist.

rai / Reuters

Source: spiegel

All business articles on 2021-10-15

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