In view of the increased energy and food prices, the federal government wants to relieve citizens of tax burdens. But among the countries first resistance stirs.
The tax relief law planned by the traffic light government is met with reservations in the federal states. Bremen announced that it does not want to approve the draft law in the Bundesrat.
Bremen must turn over every euro twice, said Mayor Andreas Bovenschulte (SPD) of the German Press Agency. “That’s why we cannot agree to a reduction in revenue of almost 100 million euros this year alone.”
The federal government’s plans provide for several tax cuts that could benefit employees and commuters in particular. However, the project is expensive for the state: the relief should amount to around 4.46 billion euros in the current year and will total around 22.5 billion euros by 2026. Of this, 60 percent should be borne by the federal states and municipalities and 40 percent by the federal government. Bremen wants to achieve greater financial participation from the federal government.
Bremen: Not manageable
Bovenschulte calculated that the plans for Bremen this year alone would mean less tax revenue of 96 million euros. “The state of Bremen receives restructuring aid from the federal government to consolidate its budget and in return has to meet strict requirements. In view of this, the reduced income cannot be coped with.” At the same time, he made it clear that it was right to relieve the burden on citizens in view of the sharp rise in energy costs and high inflation.
Several other federal states left their approval at the Federal Council meeting on Friday open. “There are still national rounds on this topic. A positioning of Saxony-Anhalt may only take place on Friday before the meeting of the Federal Council, »said a government spokesman on request. A Thuringian government spokesman made a similar statement. There is still a need for coordination, among other things among the federal states, he said. According to one forecast, the loss of revenue in Thuringia this year alone would amount to 168.5 million euros. In the future, lower tax revenues of around 50 million euros per year are expected as a result of the relief.
So far, Baden-Württemberg has also left open how it is positioned in the state chamber. According to the Ministry of Finance, the loss of revenue there would amount to 593 million euros this year. In the years 2023 and 2024, the minus would be 675 million euros each.
Greater federal involvement required
Berlin expects a burden of around 470 million euros in 2022. “The federal government must share more in the burden and move towards the states. If the Federal Minister of Finance does not take this into account more in his negotiations, it will be difficult to reach an agreement on Friday, »said the Berlin Senate Department for Finance.
Hesse expects lower tax revenues of around 380 million euros in the current year if the tax relief law comes into force. A spokesman for the Ministry of Finance explained that the law in its current version would lead to losses of around 530 million euros. However, the federal government offered partial compensation elsewhere. It should be based on fixed sales tax amounts and be regulated in another law. Hesse would benefit from this with around 150 million euros.
Hamburg’s Mayor Peter Tschentscher (SPD) pointed out that financing issues are still being discussed. “We are still open as a Senate.” He emphasized that the relief package had been communicated. “People also expect us to implement this now,” said Tschentscher. He therefore assumes that there will be a majority in the Federal Council “in the last few meters”.
The tax relief law has already been passed by the Bundestag, but still requires the approval of the Bundesrat. Among other things, it provides that the basic allowance for income tax will increase by 363 euros and the flat-rate income tax allowance will be increased – both retrospectively as of January 1st. In addition, long-distance commuters should be able to count a higher commuter flat rate – 38 cents instead of the previous 35 cents per kilometer.
Source: Stern
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
