Many of my husband’s clients are likely breathing a sigh of relief this morning. He represents a number of German corporations who pay tax rates which are much higher than their European cousins – and generally much higher than companies in the United States. In order to compete in an increasingly global market, Germany has approved corporate tax cuts effective next year. The tax cut reduces the current rate by almost 10% – from almost 40% to 30%.
German Finance Minister, Peer Steinbrueck, had fought for the cuts. Reducing corporate taxes, he reasoned, would make investments in Germany more attractive to investors.
Beer and tax cuts? Hmm. Maybe we’ll move to Munich after all.
Seriously we need to reduce corporate tax. By leaving more money in the hands of businesses the market will yield more innovation and efficiency. This in turn creates greater wealth for all.