Retroactive tax increases: traffic light government acts too late

Retroactive tax increases: traffic light government acts too late
Tillmann: Finance Minister finally sets constitutional requirements for
The Federal Cabinet's decision to retrospectively raise the basic and child allowance and to decide to decide on the tax continuing development law was criticized today as overdue. Antje Tillmann, the financial policy spokeswoman, commented on this topic.
The CDU and CSU have been calling for the constitutionally prescribed increase in the basic allowance and the child allowance on January 1, 2024. The coalition now wants to bring the law through the parliament in order to give employers the opportunity to take into account the changed allowances in the end of the year in the end of the income tax. This is to avoid millions of additional tax returns. Tillmann keeps your fingers crossed for the employers for a successful implementation of this project.
After all, the government coalition is dealing with the adjustment of the allowances for the years 2025 and 2026 and when changing the tax tariff in order to compensate for the effects of the cold progression in the coming two years. These necessary improvements are welcomed, as is the increase in child benefit by five euros.The government also prepares the abolition of tax classes III/V and the introduction of the tax classes IV/IV with a factor. The factor procedure that has existed for almost 15 years has proven to be a good method of distributing the tax burden on both spouses fairly in the income tax procedure. Nevertheless, we are critical of such a conversion by the legislator, since couples already have the choice between the tax classes III/V and IV/IV. There are often good reasons for a conscious and joint decision for III/V, such as the repayment of a loan by a partner or a common salary account. Due to the expected additional work for the tax offices, the project in the Federal Council is likely to encounter resistance.
However, the government coalition endangers the Federal Council's consent to the second annual tax law with its new attempt to introduce a national notification obligation for tax designs. The experience with the obligation to report for cross -border tax designs has shown that it has led to very few legal changes. With a success rate of less than one per thousand, the question arises whether another bureaucratic measure is necessary. The government coalition contradicts their alleged efforts to reduce bureaucracy through these new notification obligations. Therefore, it will encounter considerable resistance in the Federal Council.
The CDU/CSU parliamentary group in parliament represents the Middle People's Parties and commits the values of freedom, cohesion and personal responsibility. Based on the Christian image of man, the Union faction is committed to a strong freedom-democratic constitutional state, the social and ecological market economy, integration into the western community of values and for the unification of Europe. Friedrich Merz is the chairman of the CDU/CSU parliamentary group in the German Bundestag.