Tax cut: Government plans radical measures for companies!

Tax cut: Government plans radical measures for companies!

The political decisions regarding tax policy in Germany are currently in focus. The new government plans to reduce corporate tax from 15 to 10 percent from 2028 and thus promote investment. These measures are part of a comprehensive tax package aimed at stimulating the economy and promoting e-mobility. Finance Minister Lars Klingbeil sees tax relief for companies as an important means of strengthening the economy and announced, among other things, that companies will be able to quickly depreciate new machines at 30 percent over three years from July 1st. A super depreciation for company electric cars even provides for 75 percent in the first year, with the upper limit for subsidized cars being raised to 100,000 euros. Tagesschau.de reports that…

The federal cabinet has already approved the billion-dollar tax package. However, the measures should also be approved by the Federal Council as they could lead to loss of revenue for states and municipalities. Critics, such as the Greens and the Left, are calling for financial compensation for the affected municipalities and complain that the relief primarily benefits companies.

Skepticism about the government's plans

Economic economist Achim Truger expresses considerable concerns in this context. He views the government's plans with skepticism, especially the possible expansive effect of the measures on municipalities that are already suffering from large deficits. Truger emphasizes that the municipalities may not receive the support they had hoped for from the tax relief. He recommends that the federal government temporarily compensate for the municipalities' loss of income in order to alleviate the financial burden. FR.de reports that…

In addition, Truger criticizes the distributional imbalance in tax policy, as the relief primarily benefits corporate profits and high incomes. At the same time, he points out that the growth effects of low corporate taxes are often overestimated. The planned subsidies for companies that purchase electric vehicles are missing for private households, although positive experiences have been had with such purchase bonuses in the past.

Future outlook and further considerations

The government also plans to cut electricity prices and reduce income tax for lower and middle incomes. However, these measures are subject to funding, which makes their actual implementation questionable. Truger calls for a simultaneous increase in the burden on high incomes in order to address financial imbalances.

Overall, the planned tax reform represents a significant step in the new government's policy, but numerous skepticism and concerns accompany these developments. The upcoming political votes and the associated financial implications for municipalities and citizens will be crucial for the future success of these measures.