Fritz Güntzler, the CDU’s spokesperson for fiscal policy, has indicated a readiness to raise the wealth tax. However, he stressed that placing additional burdens on high incomes is unwise in the current economic climate, while simultaneously stating that he is open to a sensible compromise with the SPD.
Similar to the Social Democrats, Güntzler aims to ease the tax burden for citizens with small and medium incomes, a move designed to strengthen key contributors to society, focusing especially on middle-class wages. To achieve this, he proposes significantly raising the threshold for the top tax bracket, which currently stands at nearly €70,000. At present, this threshold is 1.5 times the average wage, a far cry from it being eighteen times the average wage in the 1960s. According to Güntzler, too many people are currently falling into the top tax bracket of 42 percent simply due to their salary.
He explained that increasing this threshold would have a beneficial effect that should be avoided otherwise. If the top tax rate were left unchanged, employees in the highest income ranges would automatically pay less income tax. This is because only the portion of a salary that exceeds the threshold (currently €70,000, but possibly more in the future) is taxed at the top rate.
Under this reform approach, even high earners would see a reduction in their tax liability. Nevertheless, if this outcome is not desired-which remains subject to negotiation-Güntzler stated that it would then become necessary to increase the current marginal tax rate of 45 percent for the wealth tax. This wealth tax is imposed on annual incomes exceeding €277,826 (nearly €23,152 per month). Güntzler noted that technical calculations by officials at the Federal Ministry of Finance would be needed to determine exactly how much the percentage increase must be to keep the overall income tax paid by the highest earners the same.
The CDU member also noted that this particular aspect of the income tax reform aligns with earlier statements from his own party. He emphasized that the proposal is not about the marginal rate that kicks in at a specific income level, but rather the average tax rate across the entire income. He further clarified that this adjustment does not run contrary to the decision made by the Union’s parliamentary group for small and medium-sized enterprises, which previously opposed additional tax burdens.
Güntzler is considered an influential voice within the Union faction; he is a certified tax consultant and a member of the important SME parliamentary group. He has been engaging in discussions with both the Federal Chancellor and Vice Chancellor Lars Klingbeil of the SPD, and he recently negotiated the new private pension model (the successor to the Riester pension) with the Social Democrats’ fiscal policy spokesperson, Frauke Heiligenstadt. This position could now see Güntzler acting as a bridge-builder during the income tax reform process.
For the CDU spokesperson, a crucial element of any compromise is ensuring that entrepreneurs are not disadvantaged. Many, particularly family businesses, craftsmen, and small to medium-sized enterprises, file their company income through personal income tax rather than corporate tax. Such entities often quickly fall into the top tax bracket, and some even into the wealth tax bracket. If the wealth tax were increased from its current 45 percent, Güntzler insisted that it must be absolutely clear that small and medium-sized businesses-for whom personal income tax is the primary form of business tax-must not be affected by any such increase.
