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West German Cabinet OKs heavy cuts in income taxes

The West German Cabinet approved a $6.5 billion package of income tax cuts Tuesday which it says are the biggest in the nation's history. The first stage, in 1986, will reduce taxes by $3.5 billion, mainly benefiting those with middle and low incomes, as well as families, by raising tax thresholds and sharply increasing tax-free child benefits. The second phase, worth $3 billion and due to go into effect in 1988, will reform tax thresholds across the board.

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The finance minister aims to have the new tax law passed by Parliament by the middle of next year.