The most affluent individuals globally experience the most advantages from Lindner's tax reductions
According to a research, the proposed tax reduction strategies by German Finance Minister Christian Lindner mainly advantage high-income people. A person making 8000 euros gross per month as a single earner will save 500 euros by 2025, as per Süddeutsche Zeitung's Tuesday report, which referenced an analysis by the Bremen Chamber of Labor. For dual-income families with two kids earning the same amount, the savings would amount to 400 euros annually.
However, this saving is 1.3 to 5 times more than that for ordinary wage earners, who take home between 2000 and 5000 euros gross per month, as per the study. The Bremen Chamber of Labor arrived at these figures based on the Tax Development Act, which Lindner intends to employ to mitigate the 'cold progression' issue by altering income tax brackets and the exemption threshold for the solidarity surcharge.
The study condemns this method, asserting that average-income families with children are more impacted by high inflation than wealthier individuals. As per a study by the Institute for Macroeconomics, dual-income families with two kids or single parents with one child and a net monthly income of around 3000 euros will have 260 to 320 euros less disposable income in 2024 after inflation, compared to their income before price increases in 2021.
The Commission, recognizing the disparities highlighted in the studies, might suggest policies to mitigate this income inequality. However, the Commission's recommendations, as of now, have not specifically addressed the issue of unequal tax savings between high-income earners and ordinary wage earners.
