Both the Union and the SPD reject the VAT‑increase scenario that economist Marcel Fratzscher has warned about, according to their own statements.
“An increase of the value‑added tax would be exactly the wrong way to go” said Steffen Bilger, the CDU’s parliamentary manager, in an interview with “Tagesspiegel”. He added that Germany already has one of the highest tax burden rates worldwide. “Our priority is clearly relief rather than tax increases” the CDU politician stressed.
The coalition partner shares the same view. Frauke Heiligenstadt, the SPD’s financial spokesperson, told “Tagesspiegel” that a VAT hike would affect all consumers alike, regardless of income. “That inevitably creates a social imbalance, because people on small and middle incomes spend a larger share of their earnings on food and daily necessities”. She also pointed to the slowly stabilising economy as a reason to avoid such a measure.
According to current plans, the state budget shows a shortfall of €130 billion. The black‑red coalition intends to close this gap through stronger economic growth by scrutinising and cutting expenditures.
For the Union, the emphasis is on the latter two points: “If we want to consolidate the budget, we must consistently review the spending side and reset priorities” Bilger explained.
In the SPD, the focus is mainly on revenue. “In principle, we need to examine and implement additional measures that strengthen the state’s tax receipts” said Heiligenstadt. “Before we discuss a VAT increase, all more equitable and growth‑friendly options should be exhausted. That includes ensuring the wealthy contribute more to the overall financing of the state”.
