German conservatives appeal to voters with vow not to hike taxes

BERLIN: German Chancellor Angela Merkel's conservatives promised to cap the corporate tax rate and not raise wealth and inheritance taxes in an election programme intended to see off the fading challenge of their main Greens rivals, a draft reviewed by Reuters showed on Monday.

The manifesto is in stark contrast to plans by the Greens to raise taxes on high-income individuals and the rich to fund a transition to a carbon-neutral economy and makes it more difficult for the two parties to form a coalition government after September's election.

The conservatives have extended their lead over the Greens to about 8 points in opinion polls after a divisive battle over who should be their candidate to replace Merkel, who will step down as chancellor after a Sept. 26 federal election.

Christian Democratic Union (CDU) leader Armin Laschet, who is now the frontrunner to become chancellor, hopes the election programme will cement the conservatives' recently regained lead over the Greens in opinion polls and secure victory in September.

"We want to put the economy back on a growth path after the (coronavirus) pandemic and raising taxes would be the wrong way," Laschet told a joint news conference with Markus Soeder, leader of the CDU's Bavarian sister party, the Christian Social Union (CSU).

Laschet and Soeder put on a show of unity after a bruising battle in April to be their parties' joint candidate for chancellor, in which the CDU leader eventually prevailed.

The Greens surged ahead of the conservatives in late April after they picked Annalena Baerbock, 40, as their candidate to run for chancellor, with her promise of change capturing voters' imagination.

But since then, a regional election setback, criticism over a Christmas bonus payment that Baerbock failed to declare to parliament and a suggestion that Germany should arm Ukraine have hurt the Greens.

An INSA poll on Saturday put support for the CDU/CSU at 28%, ahead of the Greens on 20%. The left-leaning Social Democrats (SPD) were on 16%, the business-friendly Free Democrats (FDP) on 13%, the far-right Alternative for Germany (AfD) on 11% and the leftist Linke on 6%.

The latest polls would not give the CDU/CSU enough support to form a coalition with the FDP, their favoured partner, but point to probably just enough support for a CDU/CSU coalition with the Greens, or a Greens-led tie-up with the SPD and FDP.

The conservatives, which are expected to approve their election programme on Monday, want to cap the corporate tax rate at about 25% from just under 30% now.