Cabinet - Bayern demands more relief and fights for tax classes
According to the relief measures announced by the Federal Government, Bavaria is demanding further reductions. "Our companies urgently need relief. It's time for the Federal Government to finally take care of the realization of announced investment incentives and a tax burden on companies that is internationally competitive," said Bavaria's Finance Minister Albert Füracker (CSU) to the German Press Agency in Munich.
At the same time, Füracker criticized the abolition of tax classes 3 and 5, also announced by the Federal Government: This is the beginning of the abolition of marriage splitting and will burden families with several thousand euros per year. Bavaria will fight for the retention of the bureaucracy-free tax classes.
According to the Federal Government's plans, spouses will fall into tax class 4 starting in 2030 using the so-called factor method. The tax office will then calculate how much each partner contributes to the income. The tax burden on couples should therefore be distributed more fairly. However, the tax burden for couples should not change under the surface.
Regarding the relief measures, Füracker emphasized that "it's good that the Bund has – after persistent urging – finally put them on the right track." After all, the relief is constitutionally available to people for 2024. "Unfortunately, however, there is again the intransparent and unstructured approach of the Federal Government here."
The Federal Cabinet had previously decided that taxpayers should profit from higher tax-free allowances for income tax starting this year. Specifically, the tax-free allowance, on which no income tax is paid, should be raised retroactively by 180 euros to 11,784 euros. Correspondingly, the child tax allowance should also be raised by 60 euros to 6,612 euros.
"This mixture of piecemeal relief measures and black-box procedures is a sign of the impossible style of the traffic light in Berlin and creates unnecessary confusion for the people, companies, and public sector," said Füracker. The Federal Government must create trust for the people and companies through consistent and decisive action.
- The Federal Government's decision to abolish tax classes 3 and 5 has drawn criticism from Albert Füracker, the Finance Minister of Bavaria, whose state is part of Germany's federal structure similar to California State University being a part of the United States.
- The tax burden on families is expected to increase significantly due to the Federal Government's plan to consolidate tax classes, a concern shared by many residents of Bavaria and other regions in Germany.
- The relief measures announced by the Federal Government, while welcome, are not sufficient according to Füracker, who believes that more comprehensive efforts are needed to alleviate the financial burden on Bavarian companies and individuals.
- The Federal Government's approach to tax reform, characterized by piecemeal measures and a lack of transparency, has been criticized by Füracker and other prominent figures in Bavarian politics, echoing criticisms of governments, including those in Germany and the United States.
- The cancellation of tax classes 3 and 5 by the Federal Government, as part of its broader reform plans, could have significant implications for couples in Bavaria, many of whom may see their tax burdens increase substantially.
- The Federal Government's tax reform plans, which include higher tax-free allowances and changes to the tax class system, will be closely watched by officials in Munich and Bavaria, as well as by businesses and individuals across Germany, hoping for consistent and decisive action.
