The Social Democratic Party (SPD) is spearheading an ambitious tax reform aimed at relieving the financial burden on 95% of taxpayers, while imposing higher taxes on the wealthy. This initiative includes a reintroduction of the wealth tax, targeting assets above one million euros, despite its previous suspension by the Federal Constitutional Court in 1997. The SPD's reform plans also propose increased inheritance taxes and a crisis levy, with the intent to shield businesses from these additional burdens.
A core element of the SPD's strategy is to enhance income tax for individuals earning over 15,000 euros monthly. This move is designed to alleviate the tax pressure on the working middle class and families, albeit sparking criticism from the Union's chancellor candidate, Friedrich Merz, who labels the plans as unrealistic. This criticism further highlights the existing political divide, providing potential leverage for figures like Sahra Wagenknecht and Alice Weidel.
A recent Forsa survey indicates that a significant majority of the German populace supports the reintroduction of a wealth tax. However, concerns persist about whether these measures will indeed provide substantial relief to the working middle class. Economic experts have expressed skepticism, questioning the efficacy of the SPD's proposals in addressing broader economic disparities.
The SPD's tax reform proposals also set the stage for possible future coalition negotiations, especially if the Union and SPD need to collaborate after upcoming elections. Meanwhile, the ongoing debate over tax reforms underscores the pressing need for fiscal policies that equitably distribute wealth and sustain economic stability amidst challenges like climate change and infrastructure deficiencies.
