In the grand coalition, the Christian Democrats had categorically ruled out tax increases. Now the position seems to be changing.
(Photo: dpa)
Berlin The CDU is discussing a tax increase for top earners in order to relieve middle income earners with the additional income. This emerges from a paper entitled “Prosperity and the Social Market Economy”, which was drawn up by the relevant commission chaired by Jens Spahn (CDU).
These proposals are to be included in the party’s new policy statement. The 18-page paper is still a working draft. The direction was agreed with party leader Friedrich Merz, it said.
If the paper is passed in this way, the CDU would take a new position in key areas of tax policy. At the time of the grand coalition, the party had categorically ruled out tax increases. Now it is at least ready for selective increases in order to facilitate relief and simplifications elsewhere.
“We want to relieve the hard-working middle class and therefore noticeably flatten the income tax rate,” the paper says. In addition, the top tax rate of 42 percent, which is currently due from an income of 62,810 euros a year, will only take effect later.
In addition, the CDU wants to “completely abolish” the solidarity surcharge. Both measures would benefit those with high incomes in particular. “In return, the tax rate for top earners in the top progression zone can rise in the sense of taxation based on ability to pay for particularly high incomes.”
The taxpayers’ association evaluates the CDU’s proposals as “positive” despite the possible burden on top earners. The “broad relief of the middle” and the omission of the solos are important, said President Reiner Holznagel.
Inheritance Tax: Lower rate, fewer exemptions
The paper also envisages a fundamental reform of inheritance tax. The existing system, which the Union had introduced itself, was “overly complicated, bureaucratic and prone to abusive tax planning,” the paper says.
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The CDU is now proposing “a uniform low inheritance tax rate of ten percent” on all of the assets to be transferred. There should be personal allowances that apply equally to all inheritances. Economists have been campaigning for such a reform – low rate, but no exceptions – for years. However, there is considerable resistance from family businesses, which have so far benefited greatly from the exceptions.
If certain conditions, such as maintaining jobs, are met, company heirs have so far hardly had to pay taxes in Germany. This means that large inheritances are sometimes less burdened than smaller ones. Experts also criticize the possibility of abuse.
In the last reform enforced by the Federal Constitutional Court, the Union took the concerns of family businesses into consideration. The possible repositioning that is now emerging is provoking criticism.
“This CDU paper is an unexpected cannon blow,” said Reinhold von Eben-Worlée, President of the family business. “Clearly, the Union wants to abolish the previous exemption rules for family businesses in inheritance tax.”
CDU thinks about abolishing trade tax
The paper also has positive messages for the economy. The CDU is campaigning for a reduction in corporate taxes. Taxes on profits that remain in the company are to be capped at “an internationally competitive level of a maximum of 25 percent”.
Abolition of trade tax is also being considered. Municipalities should be “allowed to levy surcharges on their share of income and corporation tax instead of trade tax,” the paper says.
This request came up again and again. Some economists and trade associations criticize that it is unnecessarily complicated to levy trade tax in addition to corporate income tax. However, changes to trade tax are politically sensitive. The former CDU Finance Minister Wolfgang Schäuble (CDU) had failed with a reform due to resistance from the municipalities.
With the paper, the CDU is taking a fundamental position in financial policy. She distances herself from the demands of the SPD and the Greens for higher taxes, as well as from the traditional calls for tax cuts by the FDP.
“The CDU will continue to be the party of the lowest possible but sufficiently high taxes in the future – and thus not per se the party of tax cuts or tax increases,” the paper says.
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