(Steering without taxes; 05-02; p.3)

Trade, crafts and industry as second group of people involved complain about losses in domestic turnovers and so in profits.
To shed some light on this group, it is worth mentioning that according to the latest available figures - of the year 1987 unfortunately - roundabout 87 % of German enterprises had less than ten employees, roundabout 95 % had less than twenty (Bundesministerium für Finanzen: Datensammlung zur Steuerpolitik. [translated: Federal Ministry of Finance: Data collection about tax politics.] Update: 03.12.01. p. 23).
German enterprises are mostly, to more than 80 %, owned by individuals, i.e. the entrepreneur pays - after deducing some other taxes - income tax on his profits (ibid., p. 24).

The third group are the employed. Based on statistical average income, an employee in 1999 was paid about 25 000 Euro a year which roughly equals the same amount in US-Dollars and about 16 667 British Pounds. Of this, he had as disposable income about 61% in case he had not been married and no children; if he was married, his wife not employed and they had two children, he was left with about 86%.
Tax reforms raised disposable income in the following year about one percent respectively and more cuts in income tax have already been declared. However - and that is the crucial point of the current debate -, they might be outbalanced by raised taxes on pensions and health. (Cf. ibid., p. 7f.)
Also, one should bear in mind that wage-earners, misguided by "analytising" boasters and economic criminals, had spent at least parts of their income for the "bubble-economy" and lost them after the bubbles went bust.

 

Reasons

The desolate state of the state's budget stems obviously from consciously reducing revenue. The already mentioned reforms in income tax as well as some other laws which led to tax reductions mostly for companies based on capital paved the way for that. - Apparently, the rationale behind that lay in the assumption that more suppliers will be met on the markets and so that revenue will at least not decrease even while the taxes for companies and individual entrepreneurs will. Besides, for the time being the state did not much to guarantee compliance to tax laws. (read on here)