News blog on federal politics: Cabinet initiates tax reform

The federal cabinet has launched the black-red coalition's income tax reform. The draft by Finance Minister Lars Klingbeil provides for relief that should amount to ten billion euros annually from 2028. Small and medium income earners and families with children in particular should benefit. In view of higher prices for food and energy, for example, it is important to relieve the burden on the vast majority in Germany, explained the SPD leader, who was unable to attend the cabinet meeting. The reason was a delayed return trip from the USA due to aircraft damage.

Among other things, the reform provides for a higher basic allowance above which income tax has to be paid. The top tax rate of 42 percent should take effect a little later, namely for taxable income from 70,600 euros. Child benefit and the flat rate with which work-related expenses can be claimed should be increased. To provide counter-financing, the “rich tax” for high incomes should, among other things, take effect a little earlier.

With regard to criticism of the extent of the relief, Klingbeil said: "With our reform, families with children will be able to have more than 600 euros more in their pockets per year from 2028 than they do today. Nobody should downplay that." The draft now goes to further discussions in the Bundestag and Bundesrat. According to the coalition's schedule, the reform is scheduled to come into force on January 1, 2027.

Federal Finance Minister Lars Klingbeil (SPD) can fly back from his trip to the G-20 summit in North Carolina, but later than planned. A technical problem postponed the planned start of the plane, the delegation said, and the Vice Chancellor then had to spend the night in the hotel. The Air Force and Lufthansa Technik have now given the green light for the return flight.

Russian President Vladimir Putin has described German punitive measures against Russia after the incident with an explosive drone at Leipzig/Halle Airport as a “serious mistake”. “Where is the evidence?” asked the Kremlin chief at a press conference in Bishkek (Kyrgyzstan). He described the evidence presented so far as “falsified”.

After the federal government officially blamed Russia for the attack with an explosive drone on Leipzig/Halle Airport, there were international reactions. According to its own statements, NATO wants to further strengthen its deterrence and defense capabilities after the incident in Leipzig. Von der Leyen also assured Germany of her full solidarity on behalf of the EU.

According to the federal government's findings, the attack with an explosive drone at Leipzig/Halle Airport was carried out on Russian orders. Federal Interior Minister Alexander Dobrindt said this and justified this with police investigation results, crime patterns and intelligence findings. As a consequence, Federal Foreign Minister Johann Wadephul announced that the Russian Consulate General in Bonn would be closed on September 18th.