Germany's bold tax reform could slash rates for middle earners by 2025
Carsten Linnemann has proposed a major reform to Germany’s income tax system. His plan includes raising the threshold for the top tax rate to €80,000 in annual gross income. The changes are designed to reduce the tax load on middle earners and will be discussed with the SPD in the coming months. Linnemann wants to push forward with the tax reform during this legislative term. The adjustments would take effect halfway through, giving lawmakers time to finalise details. He has stressed that any changes must be fully funded to avoid increasing the national deficit.
Talks with the SPD are scheduled for March and June. The goal is to reach an agreement that benefits workers earning between €60,000 and €80,000. Linnemann believes this reform will provide much-needed relief for the middle class, who currently face high tax rates at lower income levels. The proposal comes as part of broader efforts to modernise Germany’s tax structure. Linnemann has made it clear that delivering on this promise is a priority for his party. However, negotiations with coalition partners will determine whether the plan moves forward as intended.
If approved, the reform would lift the top tax rate threshold to €80,000. This would mean fewer workers paying the highest rates, easing financial pressure on middle-income households. The next steps depend on the outcome of discussions with the SPD in the spring.
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