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August 19, 1996|Times Staff and Wire Reports

Kohl Rejects Tax Cuts: German Chancellor Helmut Kohl said cutting taxes is out of the question since the government has already squeezed all the savings it can out of its budget. "I cannot lower taxes, and will do so under no circumstances if it leads to an increase in the national debt," Kohl told German television. "And we have reached a limit as far as savings goes." With Germany scrambling to trim its deficit to qualify for the system for a common European currency, Kohl reaffirmed the agreement of his three-party coalition to put off tax cuts until an overhaul of the tax system after the next national elections in 1999. Speaking to ZDF television during his annual vacation in the Alps, Kohl rejected calls by the Free Democrats, the coalition's junior partners, to speed up the tax relief in order to stimulate the economy. German government spending equals half of national economic output. With a top marginal income tax rate of 53%, Germany has some of the highest taxes in the industrial world.

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