Economist Achim Truger predicts that tax increases are imminent. Speaking to the “Neue Osnabrücker Zeitung” he stated that the public should fundamentally understand that higher taxes are only a matter of time and will be necessary in the medium term.
Truger pointed out that the government has already tested the waters with debates over increasing the value-added tax (VAT), a measure he felt was poorly received and unjust, particularly for those in low and middle-income brackets.
He noted that expenditures have risen sharply, notably for interest payments, defense, and infrastructure. Simultaneously, the federal government is refusing to accumulate further debt. Truger warned that without an “economic miracle” the budget shortfall will become so significant that it can only be covered through higher taxation.
Furthermore, Truger expressed serious concern about the political stability of the government. Given the heated debates surrounding current social reforms, he fears that the tone could escalate to a point of extreme polarization, causing the government to fracture. He labeled this scenario fatal in the current political climate, warning that an obsessive focus on policy priorities could deepen societal divisions and have severe democratic consequences.
The economist also assigned part of the responsibility for the fiscal gap to the federal government’s own policies. He criticized the decision to lower the VAT for the gastronomy sector or hike the parental allowance and commuting subsidy. While acknowledging that the debt brake imposes restrictions on the crisis response, Truger argued that the government must largely hold itself accountable for spending heavily on these measures, money that he believes would have been more urgently needed elsewhere.
