But already 2016: Schäuble wants to tackle fiscal drag – tagesschau.de

Date: 05/07/2015 18:06 clock

German Finance Minister Schäuble has surprisingly announced that it will relieve the citizens on January 1, 2016 of fiscal drag. He spoke of a tax reduction in the amount of 1.5 billion euros. The move was coordinated with Merkel and Gabriel.

German Finance is swimming in money. Especially Wolfgang Schäuble has announced the result of the assessment of the tax: According federal, state and local authorities can be expected as recently adopted by significantly more tax revenues in this and the coming years. By 2019, the additional revenues add up to 38.3 billion euros, Schaeuble said, citing the Working Group of the tax. The federal government can expect more than was estimated in November alone this year with 6.3 billion euros

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And so Schäuble said the sentence on was the waiting in politics for a long time: “I suggest that we solve the problem of cold progression now.” The financial leeway is there now. The proposal was agreed with German Chancellor Angela Merkel and SPD leader and Economy Minister Sigmar Gabriel.

“Aufschwug must reach citizens”

The planned 2016 tax relief would further strengthen the view of Federal Minister Sigmar Gabriel (SPD), the purchasing power of citizens. The economic upturn in Germany should arrive among workers. “Now I could make myself understood with Finance Minister Schäuble to abolish the fiscal drag quickly,” said the SPD leader.

unions and Social Democrats have called for this step for some time. “The fact that the tax revenues develop as enjoyable, not least the great commitment of the employees,” said Gabriel. The tax relief will now contribute in addition to higher pay settlements to the fact that the disposable income further increased.

Cold progression eats wage increase on

The bracket creep occurs when moderate salary increases to compensate for inflation only, the employee through it but slipped into a higher income tax rate. So he has to pay more taxes (progression effect). The workers would have none of its salary increase – probably but the state thanks to higher tax revenues. According to the Ministry of Finance showed, for example, in 2013 an average load of 16 euros per taxpayer.

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Gosh! Not long ago, Wolfgang Schäuble had blasphemed, the bracket creep admit it does not actually. After all, inflation is currently so low that this dreaded “secret tax increase” hardly reach. Consequently, a relief to individuals bring little – a clear broadside against the economic wing of the CDU. He had the mitigation of cold progression namely demanded mantra for years and thus enforced on the last party. So Schäuble is now rather out of party expediency than out of conviction. No matter what brings OBs now or not, the Union wants to finally distinguish once again as an advocate for taxpayers

This injustice in the German tax system has been criticized by all parties for a long time and cross, but their abolition is expensive: to 1.5 billion euros per year Treasury estimated the cost. Money that was not there previously.

The project must still be approved by the countries, as they are pro rata share of the cost. That Schäuble for his proposal chooses a date on which he can also countries predict a surge in revenues, appearing to be no accident

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