Green Party's bold tax reform sparks clash with CDU over fairness and funding
A clash over tax reforms has intensified between the Green Party and the Union (CDU/CSU). The Greens have dismissed Friedrich Merz’s €30 billion tax proposals as unrealistic and unfair. Their own plan instead targets relief for lower incomes while raising taxes on the wealthiest earners.
The Green Party’s tax reforms focus on easing the burden for average workers and families. They propose increasing the basic tax-free allowance by €500. The employee lump-sum deduction would also rise to €1,500, offering modest savings for many households.
An average family with two children could expect annual relief of around €120 to €150. At the same time, the Greens aim to protect businesses from higher taxes, keeping corporate rates unchanged. For top earners, the changes would be more significant. The party plans to raise the top income tax rate to 45% for annual incomes starting at €120,000. Those earning above €250,000 would face a 48% rate. These measures are designed to fund the proposed relief for lower-income groups. The Greens have framed their plan as a 'fair and feasible' alternative to the Union’s proposals. They argue that Merz’s €30 billion tax cuts lack funding and disproportionately benefit the highest earners.
The Green Party’s tax reforms would shift the burden toward the wealthiest while offering small but direct savings for families. Their plan avoids increasing taxes on businesses and instead relies on higher rates for top incomes. The debate now centres on whether the government will adopt these measures or pursue the Union’s broader cuts.
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