Berlin On Wednesday morning at 5.12 a.m. the time has come: From then on, the citizens work – purely mathematically – for their own wallets. Until then, all income for taxes and duties was paid to the state. At least that is the calculation of the taxpayers’ association, which is proclaiming its traditional “taxpayers’ commemoration day” on July 12 this year.
With the action, the taxpayer lobby wants to draw attention to what they consider to be an excessive burden on citizens. The taxpayer commemoration day reveals that, despite the relief packages, more than half of the income generated by employees is still being redistributed and administered by the state, said Reiner Holznagel, President of the Taxpayers’ Association.
The association calculates the burden on the basis of representative household surveys by the Federal Statistical Office. The more than 22 million employee households (workers, employees and civil servants) consist of an average of 2.3 people. According to calculations by the taxpayers’ association, the total income of the representative household is 7113 euros per month this year.
In a second step, the association calculates the transfers to the state. The representative household therefore pays 855 euros in income tax and 2254 euros as social security contributions (share of employees and employers). There are also indirect taxes, such as sales tax, property tax or motor vehicle tax. They add up to 637 euros per month.
The total burden for the average household is 3746 euros. This results in a tax rate of 52.7 percent and calculated a taxpayer memorial day on July 12th.
load has decreased slightly
The taxpayers’ association has also differentiated the burden according to household types. The burden is higher for workers who live alone: on average, they are taxed at 53.7 percent – their taxpayer memorial day is not until July 15th. For multi-person households it is already July 11 – here the load rate is 52.4 percent.
However, the burden has fallen slightly compared to the previous year. In 2022 it was still 53 percent for an average household and the commemoration day was not until July 13th. Among other things, the tax breaks through the reduction of cold progression or the elimination of the EEG surcharge are noticeable. They have more than compensated for other new burdens such as higher additional contributions to health insurance or the increasing care contribution.
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“The burdens are still very high,” says Holznagel. The political goal must be to push the burden rate below the 50 percent mark. Holznagel calls for income tax reform.
He also sees a need for action on social security contributions. In health care, you also have to talk about spending. He cites hospital reform as an example. The number of statutory health insurance companies is also too high.
DIW criticizes the calculation of the taxpayers’ association
There is always criticism of the calculations and the proclamation of a taxpayer memorial day. Stefan Bach, tax expert at the German Institute for Economic Research (DIW), complains that the social contributions are fully included. They are faced with individual benefits, such as pensions.
Anyone who pays more into the pension fund will receive a higher pension in old age. And if he did not pay into the statutory insurance, he would have to make private provisions.
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Even the taxpayers’ association does not deny that the payments are offset by state benefits. “With taxes, duties and compulsory contributions, important services for the citizens are financed,” says Holznagel. “Of course, they didn’t work in vain in the first half of the year – for the most part, the tax and contribution payments flow back directly or indirectly to the citizens in the form of state benefits.”
But you want to disclose how high the burden is. “So if more than half of personal income is covered by taxes and duties, this puts a strain on the economic engine of our community and on many people’s sense of justice,” says Holznagel. “We are therefore calling for a discussion as to whether this high burden is justified and whether the numerous services and the systems themselves are efficient.”
>> Read more: Citizens with this income finance half the state
Holznagel agrees with Bach on this point. The DIW expert also thinks it makes sense to discuss the level and quality of government services that are offset by taxes and levies. “We have to get better at that,” said Bach.
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