The Arbeiterwohlfahrt (AWO) has expressed concern that the income tax reform draft presented by Federal Minister of Finance Lars Klingbeil (SPD) will lead to growing inequality, specifically favoring families with very high incomes over low-income and normal-earning families. Michael Groß, the president of the AWO, told the “Neue Osnabrücker Zeitung” that he believes it is both unjust and illogical for the state to support high-income families more strongly while neglecting those struggling with poverty or earning average wages.
According to new calculations conducted by the association, the maximum financial benefit for high-earning households with children is set to rise significantly by 2028, increasing from the current 127 euros to 151 euros per month compared to normal-earning families. Over the first 18 years of a child’s life, this equates to an increase of over 5,000 euros, totaling more than 32,000 euros.
Groß criticized the federal government for essentially implementing a “who has, gets more” policy of wealth redistribution from the bottom up. He found this particularly baffling because, alongside the increased relief for wealthy families, the immediate childcare supplement for poor households-valued at 25 euros-is being cut, while child benefits are only set to increase in two stages by a total of 13 euros. The AWO pointed out that a 2024 study commissioned by the organization had already shown that the state provides better financial support through tax allowances to high-income families than to families that only receive child benefits.
The association demanded that the billions allocated to high earners be redirected toward poverty reduction instead. “We advocate using the billions that are going to people who do not need the money to invest in a fair social state,” Groß stated. Furthermore, through a recent concept submitted by the AWO aimed at reforming social benefits, they believe the rate of child poverty can be effectively reduced by one percentage point.
