Taxes: Draft bill: Tax relief is this small
The coalition's tax cuts do not even offset creeping tax increases. The Union now wants to make adjustments. And is also annoyed about other plans by Klingbeil.
Taxpayers will only receive a slight relief from the coalition's tax plans. This is according to a leaked government bill that is still in the early coordination phase and has been obtained by the Handelsblatt.
Overall, according to the bill, taxpayers will be relieved by all planned tax measures by 5.2 billion euros in 2027 and 10.4 billion euros in 2028.
The "Bild" was the first to report on the draft bill.
Due to the huge billion-euro gaps in the budget, at the beginning of July the federal government had agreed on minimal tax cuts in the coalition committee, contrary to previous announcements.
The coalition even deviated from the usual practice of offsetting the "cold progression".
"Cold progression" refers to annual, creeping tax increases.
Employees pay higher taxes due to higher wages, although their higher earnings only offset inflation.
In the past ten years, all finance ministers had always compensated for the "cold progression" and adjusted the income tax to inflation every year, so that higher taxes only became due at a higher income.
Klingbeil is foregoing this, referring to the poor budget situation.
To offset the "cold progression", income tax would have had to be reduced by as much as 8 billion euros in 2027 alone.
The Union is pushing for higher relief.
Translated by urgent.news from Handelsblatt's report; automated translation may contain errors. Machine-written — it may contain errors, so check the original before relying on it.
