Former traffic light parties cordial the tax package: Who really benefits?

Former traffic light parties cordial the tax package: Who really benefits?

The former traffic light coalition of the SPD, the Greens and FDP has surprisingly agreed on a comprehensive tax package, which is to bring various tax relief for the population from 2025. This package, which already has a majority in the Bundestag, could include the abolition of the "cold progression", which means that the basic allowance for taxes is raised by EUR 312 to 12,096 euros. Auch das Kindergeld soll 2025 um fünf Euro auf 255 Euro pro Monat steigen, gefolgt von weiteren Anpassungen in den folgenden Jahren, wie die AZ Online reported.

But not every citizen will actually benefit from these changes. Experts from the German Economy Institute warn that, despite these measures, many taxpayers could ultimately have less money available. The reason for this is increasing social security contributions and a higher CO₂ tax. So far, the Union is hesitant about the tax package, which would require quick approval in the Federal Council, otherwise a retroactive decision would be necessary.

Union plans comprehensive tax reform

In the shadow of these developments, the CDU/CSU has presented a preliminary election program that promises massive tax relief after a possible election victory. Among other things, the income tax rates are to be reduced and the top tax rate should be increased. There are plans to reduce VAT rate for gastronomy from 19 percent to seven percent and to abolish the solidarity surcharge. This election program is intended to form the basis for the upcoming Bundestag election, as reported. At the same time, a strict asylum policy is announced, which, among other things, provides for a factual stop for illegal migrants. These promises should help to regain the trust of voters, while the Union has to prepare for possible coalition negotiations after the election.