Finance Minister Lindner distances himself from plans for tax cuts

Chancellor Olaf Scholz (left) and Finance Minister Christian Lindner

Lindner sharply rejected demands for tax increases for higher income groups.

(Photo: IMAGO/Emmanuele Contini)

Berlin Federal Finance Minister Christian Lindner (FDP) is refraining from tax cut plans from his ministry in the face of resistance from the SPD and the Greens. “As long as there is no new thinking among the coalition partners, I will concentrate on what can be achieved,” Lindner told the “Bild am Sonntag”. He named tax incentives for investments and research, faster planning and approval processes, digitization, immigration of skilled workers “through to the different possibilities of tax law”.

Lindner had asked his experts for suggestions on how the economic recovery could be accelerated and Germany’s competitiveness strengthened. In an internal paper that became known a week ago, a reduction in income tax was considered appropriate given the current economic situation. While the Union liked the proposal from the Ministry of Finance, it met with little approval from the FDP’s coalition partners.

Lindner sharply rejected calls for tax increases for higher income groups. “50 percent of taxpayers pay 90 percent of wage and income tax revenue. A further burden would not be fair,” said the finance minister.

He called for a balance between solidarity and fairness: “In contrast to others, the so-called top earners from a good 66,000 euros do not receive the help of the gas price brake tax-free, but have to pay taxes on it. We’re not talking about millionaires, we’re talking about our specialists and managers who have worked hard for a qualification and bear responsibility for jobs.”

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Furthermore, Lindner expects permanently high energy prices. “It will be a new normal. Gas via the liquid gas terminals is more expensive than Russian pipeline gas for logistical reasons,” said the FDP chairman of the “Bild am Sonntag”. In his estimation, the price level will remain higher, “but without ruinous peaks”.

He called on the traffic light government to lift the fracking ban in Germany in the new year so that domestic gas can be promoted. “Not only are the prices worth rethinking for consumers, the arguments against them are also outdated,” said Lindner. “In 2021, an independent commission of experts of the Bundestag confirmed that the technology is responsible. The ban should be lifted.” Then private investors could decide whether mining is economical. He expects competitive advantages over gas from other regions of the world.

Lindner reaffirmed the Federal Government’s expectation of slightly declining inflation rates. He said: “For 2023 we expect 7 per cent, but in 2024 and beyond the figures are forecast to continue to fall. The target remains 2 percent. This must be the top priority for the European Central Bank and the federal government, because persistently high inflation would undermine our economic foundations.”

More: Lindner and the debt brake: from the keeper to the pallbearer – and finally to the savior?

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