The revenue raised is to be used to cut surging non-wage labour costs.
Cuts in taxes and in non-wage labour costs, says the paper, are the key to regaining confidence in the economy.
For as he himself points out, these are industries, jobs, that are currently being done by low-wage labour in other parts of the world.
As welfare costs have swollen, non-wage labour costs have shot up too, from 36% of gross wages in 1990 to a painful 42% last year.
This, combined with expected increases in health contributions, risks pushing Germany's non-wage labour costs, already among the highest in the world, well over 42% of gross wages.
The rebels agreed to back the measure only after the government promised to ask a new commission on health and pension reform to extend its recommendations to ways of bringing down non-wage labour costs.
This means that Ms Merkel will struggle to implement the main planks of her proposed reform programme: a flat-fee health-care premium to lower non-wage labour costs, further labour-market reforms, such as loosening Germany's strict protection against dismissal, and radical tax reform.
Germany is reaping the benefits of years of wage moderation and labour-market reforms that improved its competitiveness.
If the euro zone seeks to improve, say, wage competitiveness, labour ministers may want to meet at 17.
Avoiding social-security charges, which often drive a chunky wedge between take-home pay and employers' wage bills, can both cut labour costs and thicken wage packets.
Factories used to move to low-wage countries to curb labour costs.
Clustering around Hollywood allows each of these small units to benefit as if it had the scale of an old movie studio, but without the rigidities of the studios' wage hierarchy and unionised labour.
It also wants to promote regional wage differentials and to reform labour law more generally.
Another view is that despite the tight labour market, wage pressures will not rise by as much as the central projection supposes.
What the economy really needs, says the Bank of Spain, is to rein in wage growth and make the labour market more flexible.
Nevertheless, it seems alarmist to suggest that Indonesian wage costs alone will deter labour-intensive manufacturing, even though their rise has outpaced productivity in recent years.
He finds that, taken together, these special factors are enough to explain why the increase in wage pressure due to tight labour markets has not fed through to prices.
Her calculations also imply that the economy can continue to grow apace for some time before the Fed needs to worry about labour shortages, wage hikes and inflationary pressure.
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But if productivity growth suddenly increases, workers are initially happy with the previous pace of real wage gains, so unit labour costs decline, allowing both unemployment and inflation to fall.
Trying to limit the cost of subsidising jobs by imposing a minimum wage on employers, as Labour proposes, would merely reduce the number of jobs that employers will be willing to offer the long-term unemployed.
The second was a show of deference to Hiroshi Okuda, Toyota's chairman, who heads the Keidanren, a powerful business federation, which stands for company management and is a vocal advocate of both lower labour costs and wage-bargaining reform.
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That can be useful: labour treaties sometimes restrain wage rises that employers cannot afford.
The importance here is that the labour share is the wage share plus employer paid taxes on employment.
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British workers will be in demand and wages will rise unless employers can import labour from low-wage countries.
An economy is stimulated by spending, just as much by dollars from the wage-negotiated salaries of union labour as the investment accounts of bankers.
Yet despite an unemployment rate that has been below 5% for 30 months, and widespread reports of labour shortages, American wage growth remains low, at around 3.5%.
Although unions have gained some recognition rights and a minimum wage, Tony Blair's Labour party has made it clear that there will be no return to the legal immunities that they enjoyed before 1980.
Germany's better performance also relied on ever-stingier unemployment benefits, which increased labour supply and reduced upward wage pressure.
Many European countries, notably the Netherlands, France and Spain, have combined labour-market reforms with wage restraint in recent years.
And, in a message on Twitter, David Cameron hailed "a big day for welfare reform as we pilot a cap on benefits equal to the average wage" - adding "amazingly Labour oppose it".
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