SPD leader Esken advocates for levying higher taxes on high-income earners to subsidize aid for lesser-privileged individuals.
SPD Co-Chairperson Saskia Esken has confirmed that the party intends to alleviate tax burdens for 95% of taxpayers by levying higher taxes on high-income earners, with this initiative partially funded by them. She addressed criticism from Union's Chancellor candidate Friedrich Merz and Finance Minister Christian Lindner. "We reject the proposal to co-finance this relief through the citizen's allowance," Esken asserted towards the end of the SPD's two-day federal executive committee meeting.
The committee approved a document serving as a foundation for the federal election campaign. It encompasses tax cuts for businesses investing in Germany and aims to ease the financial burden on lower and middle incomes.
"In essence, the increased income generated from the top 1% will subsidize the relief for the 95%, necessitating a balance between the two," Esken explained. When pressed for specific numbers, she deferred to the SPD's government program. "Let me make this abundantly clear: currently, an individual earning 67,000 euros annually pays the same top tax rate as someone earning 250,000 euros. I think that's unfair."
The proposed wealth tax for high earners' income should see an increase, mirroring the top tax rate increment, Esken added. Additionally, the SPD advocates for amendments to inheritance tax.
Finance Minister Lindner had suggested funding tax relief for 95% of taxpayers through budget cuts, such as to the citizen's allowance. Meanwhile, Merz voiced concern that the top 1% of earners' tax rate would need to surge to 60% for the co-financing scheme to work effectively, as the calculations wouldn't otherwise add up.
The top earner in the proposed tax reform will contribute to alleviating the tax burdens of the majority, as Esken mentioned that the increased income from the top 1% will subsidize the relief for the 95%. Furthermore, Esken criticized the current system where someone earning 67,000 euros pays the same top tax rate as someone earning 250,000 euros, deeming it unfair.
