Taxes: Klingbeil open to relief

Federal Finance Minister Lars Klingbeil is open to higher tax relief, but is tying this to concessions from the Union. If the CDU and CSU are prepared to make concessions when it comes to the top tax rate or inheritance tax, “then I would also have ideas where we can provide even more relief,” said the SPD leader in Berlin. He himself has put plans on the table to increase the top tax rate in order to provide greater relief for the majority of citizens. However, this was rejected by the Union.

He is now advising the coalition to adopt the agreed income tax reform. The draft law should come to the cabinet at the beginning of September. The Union has been attacking Klingbeil for days because this draft provides for tax relief of ten billion euros from 2028, but does not compensate for the so-called cold progression. This occurs when wage increases that merely compensate for inflation lead to a higher tax burden and the real purchasing power therefore remains the same or even decreases.

The Green Party financial expert Katharina Beck criticized that the planned reform should not be sold as relief. “A real reduction in the burden of work would make sense, for example by reducing health insurance contributions, which would provide relief for both small and medium incomes as well as companies,” she said.