The draft law on income tax reform plans to raise the basic tax-free allowance to 12,564 euros next year and to 12,900 euros in 2028. Child benefit is also set to increase by 23 euros per month per child by 2028, and child allowances will rise from 9,756 to 10,056 euros next year and later to 10,236 euros. Additionally, the employee lump-sum deduction is to be increased by 200 euros, and the top tax rate will only apply from an income of 70,600 euros.
Criticism comes, among others, from the Ministry of Economics: In a letter from a state secretary, published by the Machtwechsel podcast, there is talk of a “hidden tax increase.” The Finance Ministry also apparently expected more – proposals for more extensive relief failed due to the lack of agreement within the coalition. The opposition speaks of a “placebo reform” (The Left), “baby steps” (AfD), and a “sham package” (Greens).
Tax expert Frank Hechtner from Friedrich-Alexander University Erlangen-Nuremberg warns that the relief would be partially eaten up by rising social security contributions. Cold progression will also not be fully offset. The Finance Ministry calculates that a family with two incomes of 5,000 euros gross each and two children will be relieved by a total of 678 euros in 2028 – without children, it is only 384 euros.
Source: www.zdfheute.de
