Tax revenue shortfalls - deficits: Are tax increases unavoidable?

Decreased tax yields and the deficits of the public budgets have touched off a discussion over tax increases. Prof. Clemens Fuest, University of Cologne, doubts that the planned measures are economically reasonable and adequate for the current economic situation. For him it would be more reasonable to launch a long-term financial change of policy in the direction of smaller government expenditures and lower taxes. For Hans-Jürgen Müller-Seils of the Federation of German Industry BDI, the proposed measures burden "in an unjustifiable manner" enterprise structures that are economically necessary. Also Prof. Gerold Krause-Junk, University of Hamburg, is convinced that tax increases are not the remedy in the present economic situation. In his opinion "stimulus cannot be expected from additional, credit financed government expenditures. Nobody will combine the confidence in an economic upturn with the undertaking of government spending programmes. Nevertheless an impulse must come, but where from? Tax abatement could be the answer. But the Federal Government wants to increase taxes!" Alfons Kuehn, DIHT, argues in his contribution for a consistent saving and dismantling of subsidies, since this would be "a way out of the ever recurring discussion of tax increases that is only a restraint to growth. Consolidation must not occur on the revenue side - as planned in the coalition contract; it must be achieved via the expenditure side.