“You all know that I could have imagined more,” says Klingbeil about the super-rich tax

Federal Finance Minister Lars Klingbeil (SPD) promoted the planned income tax reform in the Bundestag and appeared open to further relief. “You all know from the political debates that I personally could have imagined more,” said Klingbeil in the first reading of the bill. If Parliament creates more scope for relieving the burden on small and medium-sized incomes in the deliberations, the Ministry of Finance will “be happy to support this in a benevolent manner”.

The reform will relieve citizens with small and medium incomes of ten billion euros, said the minister. Given the difficult budget situation, this is “not a small sum”. The basic allowance, the child allowance, child benefit and the employee flat rate should increase. Klingbeil calculated that a family with two middle incomes and two children would have a total of more than 600 euros available per year in 2028. “600 euros is a lot of money for a family and it makes a difference in life,” he said, especially for those who have to turn over every euro twice at the end of the month. 600 euros corresponds to 50 euros per month.

The relief should be paid for by the coalition taking “more responsibility” for very high incomes, said Klingbeil. The so-called tax on the rich should take effect a little earlier, and an additional tax “for the super-rich” will be introduced for incomes of more than 280,000 euros per year. “At the top, more is done to ease the burden in the middle of our country,” said the minister. “I think that’s fair.”

The demand for improvements comes from the Union. The CDU financial politician Fritz Güntzler demanded in the ARD “Morgenmagazin” that the so-called cold progression be completely balanced out. In the draft law it will be “partially balanced, but not completely”. Since 2015, the resulting losses in purchasing power have always been offset.

The CDU parliamentary group's claim is “that we do again what has been successful since 2015,” the CDU member of the Bundestag continued. “But that will mean that we have to make significant savings.” Depending on the calculation, this would require three to eight billion euros.

The money must come from the budget and not through the dismantling of so-called tax breaks elsewhere, demanded Güntzler. The relief already provided for in the current draft law would “definitely come,” added Güntzler. However, he hopes “there is more to come”.

On Thursday morning, the Bundestag debated a draft bill from the federal government on income tax reform in its first reading.

The term “cold progression” describes the effect in which someone slides into a higher tax bracket through a wage increase that at most compensates for the inflation rate, without increasing their real income.