Balancing Tax Relief and Child Benefits

Recent legislative changes aim to increase child benefits by 5 euros while raising the basic tax-free allowance and adjusting tax scales to counter cold progression. This initiative will cost the state an additional 4.2 million euros, with an expected revenue loss of nearly 7.2 billion euros for the federal government, states, and municipalities.

Despite these tax reliefs, rising social security contributions may diminish their impact on households. Moreover, the benefits will only become apparent in hindsight, creating uncertainty for citizens.

While tax revenues have recently surged, concerns persist regarding the overall economic climate and potential GDP declines in the coming years.