German Chancellor Friedrich Merz (CDU) has rejected plans by coalition partner SPD to raise taxes on top earners and heirs. With the so-called wealth tax surcharge, church tax and the solidarity surcharge, the overall tax burden already amounts to nearly 50 percent, Merz said in an interview published Wednesday on the podcast Machtwechsel. “There really is no more room to increase it,” Merz added. “The lemon has been pretty much squeezed dry.”
At the CDU federal party conference at the end of the week, delegates will discuss a proposal under which the top income tax rate would apply only at a significantly higher income level than at present. The SPD has signaled approval, but only on the condition that the top rate itself be increased in return. That is not an option for Merz.
Millions of entrepreneurs in Germany pay income tax because they are not corporations but partnerships, he explained. “I strongly advise us not to raise their burden any further,” the chancellor said. Currently, the top income tax rate stands at 42 percent. It applies to taxable income of €68,481 for single individuals.
In addition, there is a so-called wealth tax surcharge of 45 percent for annual incomes starting at €277,826. A proposal by CDU Secretary General Carsten Linnemann would set a new threshold for the top tax rate at a taxable annual income of €80,000. The plan has drawn criticism from the Greens and the Left Party.
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