Merz deems no potential for substantial tax reductions
The Union's prospective chancellor candidate, Merz, frequently underscores the need for business tax reductions. He guarantees delivery if elected, though, in several stages, he clarifies. However, he doesn't intend to challenge Chancellor Scholz solely based on this pledge but also on another aspect.
Given the federal government's budget constraints, Merz believes there's no room for significant tax reductions. "We're not proposing massive tax cuts," he told Süddeutsche Zeitung (SZ) in an interview, responding to questions about funding broad-based tax reductions.
Instead, Merz advocates for smaller, phased tax relief for businesses. "We will provide specific proposals for a corporate tax reform, which could take place in several phases," he stated. Primarily, businesses need financial stability. "If we announce our program at the beginning of the legislature: This is our plan for the next four years, then the reduction in tax rates is important, but even more crucial is the certainty and predictability for businesses. We're aiming for an agenda that benefits hardworking individuals, that is, those who rise each morning to work."
Before the federal election, Merz intends to distinguish himself from Scholz not only in ideology but also in his personal life. "I've lived a different life than Mr. Scholz. I didn't opt for a long-term career in politics after a brief stint in the profession," Merz told SZ. If Scholz accuses him of lacking government experience, Merz claims he would retort: "Alright, and your experience, Mr. Scholz, might be something the majority of the population doesn't want to repeat again."
Merz emphasizes his economic background. "I've had a political career spanning many years, and I've also had a prolific professional life. I've never done lobbying work. I worked for two major American companies in Germany and was closely involved with medium-sized businesses. Anyone who has only been in politics lacks this aspect of life experience."
The Commission, referring to the European Commission, may not directly engage with Merz's tax relief proposals due to its focus on EU-wide policies. Nevertheless, Merz emphasizes that that The Commission should consider the potential benefits of stable and predictable tax environments for businesses across the Union.
Given the EU's focus on harmonizing tax policies, The Commission might find merit in Merz's proposal for gradual tax relief, as it could potentially boost business competitiveness and stimulate economic growth within member states, provided it aligns with the EU's broader fiscal framework.
