Chancellor Merz rejects SPD proposals for tax increases - Germany's CDU Proposes Tax Reform—But Chancellor Merz Says No to Higher Rates
Chancellor Friedrich Merz (CDU) has rejected plans by coalition partner the SPD to raise taxes for top earners and heirs. Combined with the so-called wealth tax, church tax, and solidarity surcharge, the tax burden already approaches nearly 50 percent, Merz said in an interview with the Machtwechsel podcast released on Wednesday. "That really is as far as it goes," he added. "The lemon has been squeezed pretty dry."
At the CDU's federal party conference later this week, delegates will discuss a proposal to apply the top income tax rate only at a significantly higher income threshold than currently. While the SPD signaled openness to the idea, it insisted on a quid pro quo: raising the top tax rate in return—a demand Merz flatly dismissed. Millions of entrepreneurs in Germany pay income tax because they operate as partnerships rather than corporations, he explained. "I strongly advise against increasing their burden any further," the chancellor said.
Currently, the top income tax rate stands at 42 percent, kicking in at a taxable income of €68,481 for single filers. Additionally, a wealth tax of 45 percent applies to incomes above €277,826 per year. CDU General Secretary Carsten Linnemann has proposed raising the threshold for the top rate to an annual taxable income of €80,000—a move criticized by the Greens and the Left Party.
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