German Tax Reform 2004

Introduction The planned tax reform which should be brought forward from 2005 to 2004 was supposed to put around 26.0 billion (amounting to 1.2% of GDP) back into German people's pockets. But after the compromise between CDU and SPD the mixed tax reform for 2004 saves only 22 billion for the people. This amount is not available for the most households because other limitations and regulations like the abolition of "Eigenheimzulage" reduce the surplus to a minimum for most of the …

…influencing the growth of an economy. Picture 3 gives a good overview over the most factors and possible anchor points of monetary and fiscal policies which have a direct or indirect impact on the key areas and markets. To find the balance between these policies and the goals of a government is not easy. There are several impacts which are not able to be done simultaneous or which have a negative result when they are combined.