Germany announces €10 billion tax relief against inflation

Germany announces €10 billion tax relief against inflation

This package of measures consists of increasing the level from which the maximum type of income tax of 42% and in raise the amount of family allowances assigned, he said.

The minister stressed that the government is “obliged to act” in the face of rising prices, particularly those of the Energy.

These measures are also intended to compensate “the multiplier effect” according to which a person moves to a higher tax bracket due to a salary increase to compensate for the effects of inflation, which in the end decreases their purchasing power.

If no action is taken in Germany, some 48 million people will face a tax hike starting in 2023 due to this phenomenon, Lindner said.

“That the State benefits (from the increase in tax revenue) at a time when daily life has become more expensive, it is not fair and it is also dangerous for economy“, admitted the finance minister.

“For many people, everyday life has become much more expensive. We fear that gas, energy and food prices will rise“, explained the minister of the coalition government of Olaf Scholz.

The plans of Lindner, president of the Liberal Party, were criticized by those who consider that they favor above all the people with higher incomes. Given this, he pointed out that low-income people, who receive housing assistance, will also be paid their full heating costs.

Inflation in Germany reached 7.5% in July, down from June, but remains at a very high level due to the war in ukraine.

Source: Ambito

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