GERMANY is proposing to levy extra taxes on the young to pay for the costs of the country's growing numbers of old people, under government plans for a ''demographic reserve'' levy.

Angela Merkel's Christian Democrats have drafted proposals that, if law, would require all those over 25 to pay a proportion of their income to cushion Germany against a looming population crisis.

"The German Chancellor's ruling party is seeking extra sources of revenue to pay for soaring pensions and bills for social care costs as Germany's 'baby boomer' generation ages amid a decline in the birth rate."

The German Chancellor's ruling party is seeking extra sources of revenue to pay for soaring pensions and bills for social care costs as Germany's ''baby boomer'' generation ages amid a decline in the birth rate.

The proposals, to be adopted by Dr Merkel's party cabinet after the Easter break, have not yet set a figure on the age tax but officials are considering a special levy of about 1 per cent of income.