With the exception of the Social Democrats, everyone is suddenly talking about tax cuts – but does something happen as a result?

The SPD co-chairs Saskia Esken (right) and Norbert Walter-Borjans (right) in Berlin in December.

Dhe tax policy is alive. She had been dead for more than a decade, and even the FDP had hardly dared to shout out loud for relief for citizens and businesses. Suddenly everything is different. It is hardly surprising that there are calls from the economic wing to do more for the benefit of companies. Something else is memorable: Even the Left Party is discovering the working middle of society.

The co-chairman of the parliamentary group Dietmar Bartsch is now talking about having the top tax rate only applied from a taxable annual income of 70,000 euros – instead of 56,000 euros as is currently the case. At the same time, the SPD co-chair, Saskia Esken, calls the idea of ​​lowering taxes “dangerous”. SPD general secretary Lars Klingbeil seconded by warning: “Anyone who puts on the old record of tax breaks for top earners and multimillionaires really has no ideas for the future of the country.” December, with Esken and Norbert Walter-Borjans at the helm, embarked on a new era that the Left Party wanted to overtake.

The starting point for the lively debate is the 2019 budget. As the Federal Ministry of Finance reported at the beginning of last week, it turned out to be 19 billion euros better than expected. “It is overdue for the federal government to decide more than minimal relief in this legislative period in view of a well-filled budget and also high social security reserves,” said the Secretary General of the CDU’s Economic Council, Wolfgang Steiger, of the FAZ most international competitors have long since responded. In Germany, after years of waiting, the tax rates for companies and citizens are again above average. “The Federal Finance Minister should relieve the hard-working citizens and companies in the country with such abundant budget surpluses,” demanded Steiger.

Billions are being pushed into the reserves

Federal Finance Minister Olaf Scholz (SPD) is doing what he can to nip such relief demands in the bud. The means he used last week is not new, it has already proven itself several times: Immediately after submitting the good figures, the finance minister declares that the funds have already been planned or that they are urgently needed for certain projects. In the current case, she wants to use Scholz for additional investments. For this purpose, the billions are pushed into a reserve. This is intended to finance additional expenses caused by refugees. But that doesn’t matter as long as there are still sufficient costs for asylum seekers. This budgetary trick does not only raise eyebrows among opposition representatives.

Federal Minister of Economics Peter Altmaier (CDU) has long been pushing for lower taxes for companies. The reason is that Germany is falling further and further behind in an international comparison because other countries are relieving their economies. In an early draft for the 2020 annual economic report, Altmaier wrote everything that the Union parliamentary group also urged. Because the finance minister has been rejecting this for as long as the CDU and CSU have been demanding, a longer passage in Altmaier’s draft was in square brackets.

It contained sentences such as: “For internationally competitive corporate taxation, the Federal Government will initiate measures that include, in particular, a reduction in the corporate tax rate, the improvement of trade tax credit for income tax and its introduction also for corporate income tax, better retention conditions for small and medium-sized companies as well provide a right for partnerships to opt for corporate income tax. ”In addition, the federal government will continuously review the tax law for further adjustment and relief options. Finally, the Minister of Economic Affairs dared to reissue his old battle cry to completely abolish the solidarity surcharge for all in a later second step.

But what about the demands of Altmaier, the Union faction, the Economic Council – and the Left Party won? First of all, nothing, as long as the SPD rejects any tax reform that deserves the name, and Scholz is a social democrat in the finance ministry. But more than ten years of inactivity in tax policy are again the best prerequisite for this to move into the center of the next federal election campaign. If the parties submit concrete proposals, it can be calculated who will be exonerated and who will be charged. Ultimately, both the Left Party and the SPD should be in favor in the next election campaign, shifting the tax rate and thereby increasing the upper rates. The SED successor party is currently acting a little more skillfully in marketing its intention to ask higher earners to pay more.