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Rasmussen, of the conservative Venstre party, leads a minority
government and is struggling to meet the conflicting demands of
his political allies, including on welfare and taxes. Some
parties have warned that there could be a snap election in the
autumn if their demands are not met.
Denmark's economic growth is lagging behind neighbors Norway,
Sweden and Germany, and some economists and politicians partly
blame the country's generous welfare system and high tax burden.
The government has trimmed its economic growth forecast for 2016
and 2017 to 0.9 percent and 1.5 percent, respectively, partly
due to the UK's vote to leave the European Union.
"We risk falling behind, and risk that our children won't have
the same welfare and possibilities as their peers in Germany or
Sweden," Rasmussen said at a news conference to announce the
plan.
Under the proposal income tax would be lowered for those earning
incomes below 1 million Danish crowns ($150,000) a year by 2025,
and the top marginal tax rate would be lowered to 10 percent
from 15 percent.
All measures in the plan are subject to parliamentary approval,
with political negotiations to take place between now and
year-end.
The Liberal Alliance had made the lowering of the top marginal
tax rate a key demand, threatening to withdraw support for
Rasmussen's government if it was not met.
The prime minister also proposed raising public spending by 0.5
percent per year to 22 billion Danish crowns in 2025, with a
focus on care of the elderly, education and security.
The plan also envisions raising the pension age earlier than
previously planned to 67.5 years in 2025, up from 67, and to 68
years in 2030.
Rasmussen said Denmark's immigration policy would also be
tightened further, as well as measures to make real estate
investments less attractive by reducing interest deductions.
(This version of the story has been corrected to remove
erroneous description "center-right" for Liberal Alliance in
paragraph 8)
(Reporting by Jacob Gronholt-Pedersen, additionel reporting by
Erik Matzen; Editing by Raissa Kasolowsky)
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