Germany Economist Proposes VAT Hike to Fund Tax Cuts

• Economist Bert Rürup proposed raising Germany’s standard VAT to 22% and cutting the reduced rate to 5%, saying it could raise about €40 billion.
• He argues the extra revenue should fund lower income and corporate taxes without adding new debt.
• Rürup says the plan would shift the tax burden from earnings to spending and could support investment and growth.
• The proposal would likely raise prices for many goods and services, while easing costs for some essentials through the lower reduced rate.
• It is politically difficult, and it is unclear whether Chancellor Friedrich Merz’s government will adopt it.

Source: vinetur.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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