SPD-Left demand tax increases for top earners

The head of the SPD employee wing, Klaus Barthel, also called on the FDP to rethink, referring to the coalition agreement in which the Liberals, among other things, pushed through the waiver of tax increases and new taxes. “The FDP will have to move beyond the coalition agreement here,” Barthel told the Handelsblatt.

At the end of February, the leaders of the SPD, Greens and FDP had decided on several relief measures due to the drastically increased prices for gas, electricity, oil and fuel. In the tax return, the basic allowance, flat-rate income-related expenses and, limited to 2026, the commuter flat-rate for long-distance commuters are to be increased retroactively to the beginning of the year.

Lindner against VAT reduction on diesel and petrol

The EEG surcharge for green electricity will be removed from the electricity bill in July and financed through the federal budget. There should also be an immediate bonus for children affected by poverty. Since the relief package was passed, energy prices have risen significantly, partly because of the war in Ukraine.

The head of the Greens, Ricarda Lang, therefore suggested in the “Bild am Sonntag” that all citizens should be paid “energy money”. “This means that everyone has more money in their account, and people with little money benefit the most.” The immediate child bonus and the abolition of the EEG surcharge, which the coalition decided, were not enough.

Lower Saxony’s Prime Minister Stephan Weil (SPD) also considers further relief to be essential. “A temporary reduction in VAT could make sense,” Weil told the Handelsblatt. The treasury earns a lot from the taxes on the rising energy prices, said the SPD politician. “We have to talk about how we can give back some of the additional tax revenue,” says Weil.

Federal Finance Minister Christian Lindner (FDP) had meanwhile rejected a reduction in VAT on diesel and petrol in an interview with the “Tagesspiegel”. Instead, there should be other measures quickly, Lindner continued. In the meantime, the minister is planning concrete help for car and truck drivers.

They should get a discount on the price of petrol in order to reduce the expenditure per liter of fuel to less than two euros, reports “Bild”, citing government circles. The exact amount of the discount is still open. It could be 20 cents per liter, but possibly even more.

Government is working on new economic aid

Economics Minister Robert Habeck (Greens) reacted cautiously to the Lindner initiative. His criteria are not yet shown in the proposal, Habeck said on ARD. That could be done even better. Relief must always take all forms of energy into account, be combined with efficiency measures and provide an incentive to use less energy.

The President of the Federation of German Industries (BDI), Siegfried Russwurm, called on the Federal Government to protect not only consumers but also industrial companies. In his words, politicians should reduce energy and electricity taxes as quickly as possible and support companies with electricity network charges.

The SPD politician Weil was open to supporting the economy. “Industry needs stable prices, especially the energy-intensive companies,” he said. “If the price level remains so high, then many companies will not be able to sustain it in the long term.”

The federal government is already working on new economic aid to cushion the consequences of the Ukraine war for German companies. Among other things, it is being considered to set up a Russia protective shield, similar to the Economic Stabilization Fund (WSF) in the corona crisis. But a separate protective shield for the energy industry is also under discussion, as several government officials told the Handelsblatt.

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Last Thursday, the European Commission proposed that companies affected by the consequences of the war against Ukraine be granted loans with particularly favorable interest rates or limited grants due to the current sharp rise in gas and electricity prices. This is intended to mitigate the consequences of the Russia sanctions for companies in the EU. EU countries have the opportunity to comment on the proposal.

The Federal Ministry of Economics is now examining the Brussels authority’s proposals for a new crisis aid framework, said a ministry spokeswoman for the dpa news agency. “It is true that sanctions and the consequences of sanctions are not legally liable for compensation, but of course we help where companies would otherwise be forced to their knees because of the effects of the sanctions.”

SPD politicians: Help – yes, “watering can effect” – no

The SPD-Linke Barthel suggested “direct direct help” for middle and lower incomes as well as for particularly affected companies and sectors. “What we want to transform must not go down the drain beforehand,” he warned. However, there should be no “watering can effect”, for example no general tax cuts or relief with deadweight effects.

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With regard to financing, Barthel mentioned a higher top tax rate, a wealth tax, effective tax enforcement and a higher minimum tax rate for trade tax as options.

The SPD member of the Bundestag Sebastian Roloff also sees a need for action. “We are facing a large number of global challenges that we can only overcome if we invest in our country and if we mitigate the negative effects on citizens and companies,” said the co-chair of the Democratic Left Forum in the SPD (DL21) the Handelsblatt.

But that all costs money. “Therefore, the debt brake must first be removed so that we can invest properly,” emphasized Roloff. At the same time, however, revenues would also have to be increased. “We should urgently talk about a wealth levy, higher taxes for higher earners and reform of the inheritance tax.”

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