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Tax gifts in comparison: AfD and Trump in the attack on justice!
Tax policy in Germany is in focus as parties discuss different reform approaches to economic stability.
Tax gifts in comparison: AfD and Trump in the attack on justice!
Tax policy is increasingly becoming a political issue in Germany and the USA, especially in the context of the upcoming federal election in 2023. A recent analysis highlights the need for fair reforms to counteract the promises of right-wing populist parties such as the AfD. South German newspaper reports that there are parallels between the tax policy under Donald Trump and the AfD's plans, which raises questions about the fair distribution of tax benefits.
Trump recently unveiled a tax package he calls the “Big Beautiful Bill.” These tax cuts have been seen by critics as a step towards increasing social inequality in the USA. Critics also warn that Trump's reforms could endanger the country's financial stability. The German federal government is now faced with the challenge of monitoring these developments and developing adequate answers in order to offer citizens fair structures.
Tax structures in Germany
In Germany, tax revenue is central to financing public services, including the maintenance of roads and social facilities. In 2023, the federal government collected around 918 billion euros in taxes, with the prospect that this figure could exceed the one trillion euro mark in the coming years. Federal Agency for Civic Education explains that the main sources of this revenue are VAT, wage and income tax and corporate taxes.
At the same time, economic growth in Germany is hardly noticeable. The gross domestic product (GDP) is at the 2019 level, while the tax rate in 2023 was around 23 percent. Tax revenues typically fall in times of crisis, while they increase in times of stability, which further fuels the discussion about sustainable tax policy.
Parties and tax reforms
The parties in Germany present different approaches to tax policy that affect millions of people, especially when it comes to income tax. Here is an overview of the tax plans of the most important parties:
| party | Planned measures |
|---|---|
| CDU/CSU | Reduction of income and corporate taxes, removal of the solidarity surcharge, reduction of VAT in restaurants |
| SPD | Reduction in income tax, increase for top earners, tax bonus for companies when investing, reduction in VAT for food |
| Greens | Higher taxation of heirs and assets, tax credits for low incomes, tax investment bonus for companies |
| AfD | Reduction of income and corporate taxes, abolition of property tax and real estate transfer tax, abolition of inheritance and wealth tax |
| FDP | Significant reduction in income tax, reduction in corporate tax, removal of the solidarity surcharge, reduction in VAT in restaurants |
| Left Party | Removal of VAT on basic foodstuffs, reduction of income tax, introduction of a tax on the rich and wealth tax |
The discussions about these tax plans have significant implications for the political landscape and the electorate. The CDU/CSU and FDP emphasize that tax cuts promote economic growth and boost consumption. In contrast, the SPD and the Greens focus on redistribution through higher taxation for the wealthy. However, demographic change and fixed spending limits the federal government's political scope and make transparent and fair tax policy one of the biggest challenges in the coming years.
According to many experts, balanced budgets have become a rarity in the current economic situation. This issue will continue to be the focus of the political agenda in the coming weeks and months.