Monika Schnitzer, head of the government’s economic advisory council, described the Union’s plan to lift the threshold for the top income‑tax rate as expensive and largely pointless. She told the “Rheinische Post” (Thursday edition) that achieving a noticeable tax cut would quickly become very costly. The Union’s proposal alone could cost the state double‑digit billions of euros per year, and would only relieve an average earning family by a mere €13 a month.
At the same time, she pointed out that contributions to health and nursing‑care insurance have risen sharply. “The proposed tax relief essentially offsets the additional burden that the same family will face from the higher health‑insurance surcharge at the start of the year” Schnitzer said. “And those contributions will continue to rise. It would therefore be far more sensible to curb this added load through reforms of the social‑insurance system, making it more efficient-for instance, by firmly implementing the hospital reform”.
Schnitzer argued that the coalition’s announcement of tax reliefs in the coalition agreement taps into public sentiment, especially amid the growing burden from social‑insurance contributions. “This discussion should, however, be considered against the backdrop of large budget gaps in the coming years. Those gaps have also arisen because the federal government spent a lot of money on single‑interest items-such as raising the maternity pension and lowering the VAT on gastronomy”.
