The Union faction sharply criticizes the planned income tax reform

Just over a week ago, the federal government approved Finance Minister Lars Klingbeil's draft income tax reform. According to the plans, families with children and households with low to medium incomes will primarily benefit. However, criticism of the plans of the SPD-led Ministry of Finance is now growing in the Union faction: greater relief is being demanded.

Some members are opposed to only partially dismantling the so-called cold progression in the coming year. They demand full compensation - that is, to ensure that wage increases are not eaten up by inflation and tax progression. “At least the cold progression should be balanced out in 2027, just as every other federal government has managed to do in recent years,” said the chairman of the Christian Democratic Workers’ Association (CDA), Dennis Radtke, to the Rheinische Post.

“Microscopic relief”

Radtke criticized: "Unfortunately, the plans fall far short of what would be necessary to relieve the burden on citizens and companies." More is needed than “microscopic relief that can only be guessed at.”

In order to finance greater relief, Radtke suggested reducing financial aid. According to the subsidy report, state aid for individual industries or companies totaled around 78 billion a year, said the CDU politician. "You have to have debates, even if it's painful." He also brought up waiving the third level of the mother's pension - that would "bring in five billion alone".

Radtke also wanted “more courage from my party to close the gaps in inheritance tax.” He also spoke out against planned cuts in housing benefit.

Also criticism of the sugar tax

Radtke is not alone in his criticism, as the Bild newspaper previously reported, citing faction circles. Numerous members of the Union parliamentary group did not want to agree to the plans. At a meeting of the finance working group, CSU finance politician Florian Dorn described the previous plans to reform income tax as “embarrassing and too puny,” according to the report. His CDU colleague Olav Gutting said at the meeting: "I'm not going to take part in this anymore."

In addition to the criticism of the lack of compensation for the cold progression, there is resistance to the sugar tax. On Tuesday, all twelve members of the agriculture working group spoke out against the planned introduction. The reason given was that tax increases had been excluded in the coalition agreement. According to the Bild report, the CDU budget politician Andreas Mattfeldt accused Federal Finance Minister Klingbeil of looking for new sources of money despite increasing revenues, according to the Bild report.

Criticism from the Federal Ministry of Economics

The coalition's current plans involve relief of around ten billion euros annually. The full relief volume is to be achieved in two stages by 2028. The relief is to be counter-financed, among other things, by a higher tax burden on very high incomes.