German gov't agrees to largely abolish 'solidarity' tax

Germany's government has agreed to largely abolish a tax designed to fund the cost of German reunification 30 years ago

BERLIN -- Germany's government has agreed to largely abolish a tax designed to fund the cost of German reunification 30 years ago.

Cabinet agreed Wednesday to end the 'solidarity charge' that about 90% of taxpayers, including companies, currently have to pay. From 2021 onward only high-earners will have to pay the tax, which generated almost 19 billion euros ($21 billion) last year.

German Chancellor Angela Merkel's center-right Union bloc wants the complete abolition of the tax, noting that the money generated goes into the general tax pot and isn't directly earmarked for spending in the former East Germany.