“Dangerous to cut taxes now”

The co-chair of the Social Democrats Saskia Esken does not believe in the demand to use the record surplus of the federal government for tax cuts. Friedrich Merz is not surprised.

Saskia Esken, Federal Chairwoman of the SPD

SPD chief Saskia Esken rejected calls for tax cuts after the federal government’s record surplus was announced. “I really think that’s a dangerous proposal to cut taxes now,” Esken told Bayerischer Rundfunk (Bayern 2, “radioWelt am Morgen”). Instead, she called for a “long-term investment plan” so that investments could be made regardless of the cash situation and the economy, for example in schools, streets and local public transport. One does not know how the income situation will develop.

Supported by low interest rates, the federal government achieved a record surplus of 13.5 billion euros last year, despite the weak economy. In addition, there are 5.5 billion, which, contrary to what was planned, were not withdrawn from a reserve. For the third time since 2015, the federal government has had a budget year with a double-digit surplus. The previous record in 2015 was 12.1 billion.

Economy Minister Peter Altmaier (CDU) has long been calling for lower corporate taxes and a complete abolition of the solidarity surcharge. The left and the FDP had also called for the record surplus to be used for tax relief.

The possible CDU chancellor candidate Friedrich Merz does not expect tax relief for companies and citizens despite the high budget surpluses. The Union would be for it. “But I am not very confident that the Social Democrats in their current constitution could be won over to make such a reform,” said Merz on Tuesday. “So we have to be patient and wait for the next term.”

“We will probably put these surpluses in a reserve somewhere and then have them available at a later point in time,” said Merz. He called for the solidarity surcharge to be abolished earlier and for everyone. “But that is also an issue that cannot be done with the Social Democrats.” The soli is to be abolished for 90 percent from 2021 and at least reduced for another 6.5 percent of the payers.