Tax Relief and Child Benefit Plans Face Criticism

The former coalition parties in Germany have proposed tax relief measures and an increase in child benefits starting in 2025. These include adjusting the basic tax-free amount to curb 'cold progression' and raising child benefits incrementally.

Despite this, many average earners may see negligible net gains due to rising social contributions and CO2 prices. Families with children are expected to benefit the most, while singles and single parents with average incomes might face continued financial strain.

The proposals require approval from the Bundestag and Bundesrat, with the latter needing support from union-led states. Political maneuvering is evident, with the SPD and Green Party aiming to pass these measures before the next elections.

Critics argue that the relief primarily benefits high earners and falls short of offsetting additional financial burdens for many households. The debate continues as the government seeks to balance economic stimulus with fiscal responsibility.