The high tax and contribution burden on the middle class in Germany - an analysis by Prof. Andreas Peichl.

The high tax and contribution burden on the middle class in Germany - an analysis by Prof. Andreas Peichl.

According to a report by www.agrarheute.com The middle class in Germany bears one of the highest tax and contribution burdens in a European comparison. The marginal tax is around 50 percent of gross income in the German tax and transfer system, which means that people with middle incomes actually only keep half of their additional earnings.

This high level of stress also affects the motivation to work more and achieve higher levels of performance, as these only pay off to a limited extent for medium-sized companies. According to Prof. Andreas Peichl, director of the ifo Center for Macroeconomics and Surveys, people with middle incomes are at the edge of their carrying capacity. At the same time, it is hardly worthwhile for people with low incomes to do additional work due to the German tax and transfer system.

More than 80 percent of Germans classify themselves as middle class, although statistics place significantly fewer people in this category.

These facts show that the high tax and contribution burden in Germany places a heavy burden on both the middle class and people with low incomes. This could have long-term effects on work motivation and the country's economic development. A possible consequence could be a slowdown in economic growth and lower productivity in certain sectors. As a result, the financial sector could also be affected, as lower productivity and economic growth could impact investments and profits. It is important that the government takes measures to review and, if necessary, correct tax and contribution burdens in order to avoid long-term negative effects on the economy.