Habeck agrees with his party’s criticism of Lindner’s plans to compensate for cold progression.
(Photo: dpa)
Berlin Economics Minister Robert Habeck (Greens) is on a confrontational course on tax plans by Finance Minister Christian Lindner (FDP). He told the “Süddeutsche Zeitung”: “The cold progression is a nuisance for many people, of course. But the question is, which problem do we have to prioritize solving this fall? Rich households and people with lower incomes pay the same high energy prices. But the rich can handle it. Those who earn little don’t. So we should act according to the principle that lower incomes benefit absolutely more than higher ones. We have to secure a democratic consensus in socio-political terms.”
Habeck said that the coalition would have to discuss political logic. “I don’t see how we can argue in this situation that those who need less support are absolutely relieved. If you could agree on that, then you can lay your hands on the instruments professionally. And there is also a date that is linked to this: October 1st.” From then on, the state gas levy should apply. “The municipal utilities issue their bills. A relief package must be available at the same time,” said Habeck.
Lindner had presented plans to compensate for the cold progression with a volume of ten billion euros, which he said would benefit 48 million people. The plans were criticized by politicians from the SPD and the Greens as being socially unbalanced.
Cold progression is a kind of creeping tax hike when pay rises are eaten up by inflation but still result in higher taxation. Higher taxes then apply, although purchasing power does not increase in real terms.
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Habeck said with a view to the sharp rise in energy prices: “Anyone who has so little money that they live on social transfers or receive housing benefit should be fully relieved of the additional costs for energy on average, lower and middle incomes proportionately.” This is the logic according to which the federal government should act. “It gives us a good chance as a country to come out of the winter strong and united.”
With these measures, Lindner wants to reduce the inflationary burden
Habeck also defended the planned state gas levy from autumn. “The alternative would have been for gas importers to go bankrupt and the gas supply threatened to collapse,” said the minister. “Under the political framework under which this coalition works – no tax increases, a balanced budget next year – the levy is the logical consequence. It also follows the principle of solidarity. This includes that the state should not collect additional VAT. We agree on that and will resolve this issue.”
Lindner in particular insists that the debt brake will be observed again in 2023.
More: Who would benefit from Lindner’s tax relief