The Union no longer rules out raising the top tax rate outright, Reuters’ “Handelsblatt” (Friday edition) reported, citing party and parliamentary sources. The condition is that the increase would be part of a comprehensive tax reform that brings significant relief to most taxpayers.
Tax specialist Stefan Bach of the German Institute for Economic Research (DIW) has recently presented a proposal: it would eliminate the so‑called “middle‑class tax burden” – the steep rise in tax for middle incomes – and abolish the solidarity surcharge entirely. In return, Bach recommends raising the top rate from 42 % to 49 %, but only for annual incomes above €90,000.
CDU finance spokesperson Fritz Güngzler said the plan was “in the right direction”. He told the newspaper that the proposals could trigger a debate on the urgent reform of the income‑tax structure. “We need measurable relief for low‑ and middle‑income earners” he added.
Support also comes from CSU parliamentarian Florian Dorn, who serves on the Union’s finance committee. Dorn viewed the concept as a solid basis for a bold income‑tax reform during coalition talks. “Almost everyone will have more money in their pockets, especially the middle class will feel noticeably relieved” he said.
Even some party leaders are now showing a willingness to negotiate. An increase in the top rate could be necessary to pass a substantial tax overhaul, they said.
Güngzler ruled out tightening inheritance or wealth taxes for financing. “Both would come at the wrong time” he said. “They would add further uncertainty to an already shaky economy”. He urged budget cuts and the elimination of subsidies instead, and floated the idea of raising the value‑added tax. “I could see a moderate increase in the VAT under this framework” he said.
