FACTBOX-German plans for new economic stimulus package

Jan 4 (Reuters) - German government leaders meet on Monday
to discuss a second package of stimulus measures to help
Europe's biggest economy weather a deep recession.

Chancellor Angela Merkel's coalition -- a partnership of her
Christian Democrats (CDU), the conservative Christian Social
Union (CSU) and the centre-left Social Democrats (SPD) -- agreed
a first package in November estimated at 31 billion euros over
the next two years, but it has been criticised as too modest.

Below are highlights of what is known about the contents and
timing of the second package:

* Government officials have said the second package is
likely to total around 25 billion euros ($34.71 billion),
although SPD proposals foresee it totalling about 40 billion
euros.

* The outlines of the package could be agreed at the meeting
of coalition leaders on Monday, but the new measures are not
expected to be finalised until a subsequent meeting scheduled
for Jan. 12 or, failing that, in the second half of the month.

* Merkel's CDU and their CSU allies agreed at a meeting on
Sunday that the new stimulus should include new spending on
infrastructure projects. They also want to cut health insurance
fees and raise the annual salary threshold for which no income
taxes must be paid to 8,000 euros from 7,664.

Their plans foresee steps to eliminate so-called "cold
progression", a process in which taxpayers are bumped up into
higher tax brackets even when their real incomes have not grown.
This occurs in Germany because tax brackets are not adjusted
automatically for inflation.

* The SPD is against tax cuts, arguing that German consumers
will save rather than spend additional income they receive from
such measures. The party agreed on Sunday to proposals that
include 10 billion euros in new federal spending on
infrastructure as well as cuts in health insurance fees, higher
child benefits and incentives for people who trade in their old
cars and buy climate-friendly autos. To help pay for its plan,
the SPD wants to raise the top income tax rate to 47.5 from 45
percent and apply it to those making 125,000 euros per year,
down from 250,000 currently.
(Compiled by Noah Barkin)