Wed May 3rd, 2006 at 10:14:08 AM EST
From today's FT via this morning's European Breakfast:
High earners hit as German coalition unites on tax reform
Germany's top earners face higher taxes while the country's parents are set to receive extra child benefits following plans agreed yesterday by the grand coalition government of Chancellor Angela Merkel.
In a display of unity ahead of tougher decisions this year on economic reforms, the coalition of centre-right and centre-left parties agreed a 3 percentage point tax rise for those earning more than 250,000 ($415,000, £170,000) a year and a new allowance of up to 1,800 a month for new parents.
The policy moves were both agreed in principle last year, but had since become entangled in inter-party squabbles. The government hopes that the adoption of the measures will help dispel worries that it has failed to act decisively on its reform agenda since taking office in November.
Party leaders yesterday stressed that the coalition was on course to agree details in the next few months of significant health sector reform, and of changes to the way companies are taxed. On both issues, Ms Merkel's Christian Democrats and her allies in the Social Democrats have starkly differing views on what form the changes should take.
"We are now on course to achieve agreement this year on both of these aspects," said Hubertus Heil, SPD general-secretary.
Heaven forbid that certain other countries might take a hint from this action to remedy their growing financial problems, even if it may be perceived as symbolic!