German tax reform debate pits SPD against CDU over fairness and funding

A battle over tax fairness unfolds in Berlin. Will higher taxes on the wealthy fund relief for others—or will targeted cuts win the day?

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2026 April 27 . 4:02 AM

1 min read

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German tax reform debate pits SPD against CDU over fairness and funding

In an interview with Bild (Tuesday edition), Dirk Wiese, the SPD parliamentary group's managing director, stated: "We have firmly agreed on tax reforms targeting low and middle incomes. It also makes sense to raise the threshold for the top tax rate—while simultaneously increasing taxes on very high earners." Wiese did not specify the income level at which the higher rate should apply.

Bettina Hagedorn, the SPD's financial policy spokesperson and member of the Bundestag, called on the Union and CDU General Secretary Carsten Linnemann to present proposals for offsetting the tax relief for low and middle incomes. "We all agree that we want tax cuts for the working middle class," Hagedorn told Bild, "but we need a way to fund them. And that's exactly what Carsten Linnemann isn't proposing."

Steffen Bilger (CDU), the parliamentary managing director of the Union's Bundestag group, warned the SPD against raising taxes: "We don't want tax hikes. That's what we agreed on in the coalition. Instead, we're pushing for targeted tax cuts—for people, our economy, and our country. We've already implemented the first agreed measures, like reducing the agricultural diesel tax and the hospitality VAT rate. Now it's about ensuring that low and middle incomes benefit significantly. We're working on that, and it needs to move forward quickly."