Taxes: Why Schäuble wants to fight the cold progression – SPIEGEL ONLINE

Wolfang Schäuble is 72 years old. But he had “not lost knowledge of basic arithmetic in advancing age,” which, the Federal Finance smirked on Thursday at the presentation of the new tax estimate. After this again predicts an increase in revenue, resulted Schäuble calculation skills now apparently: The time has come for a tax relief – by breaking down the cold progression

So far, the tax burden of employees may increase, even if their wages do not rise more than. prices. This is due to the disproportionately with rising incomes rising tax rate. The unsightly effect arose because the tax rates have not been adjusted to the price development for years.

This will Schäuble now change with a “tariff on wheels”: every two years to the tax levels of price trends are equalized. The first adjustment is planned in 2016. An improvement would be all but their effect remains for the time being manageable.

The taxpayers

In recent years, the burden of fiscal drag was not higher than that by a lunch in the restaurant: 16 euros lost taxpayer according to the calculations of Federal Ministry of Finance in 2013 on average. The reason is that inflation is very low at present, it was in 2013 at just 1.3 percent. He’ve always said, “that no major relief is for individuals”, Schäuble, the date as an argument used against the low inflation changes said.

If prices rise again, however, the effect takes a disproportionate: In one percent inflation, the average load would be 17 euros, according to Finance Ministry this year. With an inflation rate of two percent – as they actually aspires to the European Central Bank -. Would it against already 73 euros

Given the current price levels, however, the elimination of bracket creep is superfluous, criticized the tax policy of the Green Party, Lisa Paus. Anyway would benefit mainly high earners. “Instead of a reduction of cold progression, we need an income tax reform that reduces targeted families and people with low and medium incomes.”

The Treasury

So modest the average effect of bracket creep currently may sound, over longer periods of time it is remarkable especially for high earners. With an annual income of 50,000 euros, the burden was in 2014, according to calculations of Economic Experts in relation to the 2006 good 770 euros.

Given the good performance of tax revenues Schäuble can currently well without the additional revenue. The cost of the proposed reform are his reportedly at relatively low 1.5 billion euros per year.

But it gets exciting, if no longer develop government revenues as well or other objectives have priority again. Even the start of reform in the coming year Schäuble justified with the fact that they had finally decided in 2015 already an investment package. If future governments have different priorities, they could take the planned progression report only to note – it would not be the first expert Commission presented it so. Bavarian Finance Minister Markus Söder (CSU) called for even: “I hope this is not just once but permanently.”

Before Schäuble needs but anyway the consent of the countries. “We have not yet,” he conceded. The ruled by the SPD and Greens countries had a first foray in 2012 declined and demanded in return for an increase in the top rate for top earners. But the SPD is part of the federal government and the states have increased tax revenues. But the project will provide for still much haggling, especially Schäuble is currently struggling with the country managers and a reorganization of the financial relationship and a reform of inheritance tax.

The Coalition

It is not just the gushing tax revenues move Schäuble to take this step. It is also about the political signal that the state can participate in the citizen to the good economic development. The upswing in Germany must arrive at the workers, it says Economy Minister Sigmar Gabriel (SPD).

In addition, the finance minister, the debate about the bracket creep one wants to end once and for all. The calls for abolition of cold progression accompany Schäuble for years – and annoyed him visibly. The business wing of his own party did not rest and placed at the last CDU party against the leadership of the decision by that creeping tax increases should be addressed in this legislature. Schäuble, however long saw no need for action.

But rankled him that increasingly made the SPD pressure on the subject. After an unsuccessful tax increase election campaign in 2013 persuaded SPD leader Gabriel for a few months of relief the word – from the perspective of Schäuble’s an affront. Now he wants to prevent the comrades try to score in the next election campaign with the theme.

Schäuble assured now that he had coordinated the project with both the Chancellor and the SPD leader. Sigmar Gabriel emphasized that but, if you once again: “Now I could make myself understood with Finance Minister Schäuble to abolish the cold progression quickly.”