One of the German government's panel of independent economic advisers, Wolfgang Wiegard, has urged the government to cut taxes on capital income to make the country a more attractive destination for investment.
"Capital is internationally mobile, it can move if it's too heavily taxed in Germany and that is what we have seen in recent years," he said, according to the text of a German radio interview due to be broadcast on Sunday.
Wiegard, who heads the panel of so-called "wise men", said all forms of capital income, from dividends to interest income, company profits or proceeds from asset sales, should be taxed at the same rate, which he said should be set at around 30 percent.
"That would be competitive internationally," he said, noting that Germany risked losing investment to new European Union entrants with much lower tax rates, once the 10 new member states from eastern and southern Europe join in May.
The government and opposition have both said they want a major overhaul of Germany's notoriously complicated tax system, widely criticised by business leaders as a burden on investment, which treats different forms of capital income in different ways and sets varying rates, some dependent on personal tax levels.
Wiegard said the top tax rate on income from wages and salaries should be cut to 35 percent from 45 percent at present, saying it would be hard to make up for the funds lost through any wider cut.
He also called for tougher controls to prevent state governments from running up excessive budget deficits and thereby threatening Germany's ability to meet EU budget deficit rules, which encompass Germany's entire public sector budget.
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