The first-time financial analysis of the party plans is fueling the 2021 election campaign, which so far has not been dominated by factual issues. “The calculations show a remarkable dichotomy in the party landscape,” says Achim Truger, who is a business practitioner. “The Union and FDP want to relieve high-earning and rich people. The SPD, the Greens and the Left, on the other hand, demand a little more from upper incomes in order to improve the financial situation of the middle of society and low-wage earners.”
The Center for European Economic Research (ZEW) has for the Southgerman newspaper calculates how the parties’ tax and social plans for election financially affect individual citizens. There are big differences. Prominent politicians immediately use the results in the election campaign. “Our goal is to make the tax system fairer,” says SPD Chancellor candidate Olaf Scholz. “We want to lower taxes for more than 95 percent of the population. This will reduce the burden on low, medium and very good incomes.”
“The CDU is not interested in low-wage women, but even more so in the richest,” explains Katrin Göring-Eckardt, leader of the Greens in the Bundestag. “If the Union prevails, the gap between rich and poor will widen further,” added Federal Managing Director Michael Kellner.
So far, the Union has not wanted to comment
The Union remained unusually reticent. Chancellor candidate Armin Laschet (CDU) and CSU boss Markus Söder initially did not want to comment on the calculations when asked. These show, for example, that the proposals of the Union and FDP increase inequality in Germany, while the plans of the SPD, the Greens and the Left reduce both inequality and the risk of poverty.
“Since the turn of the millennium, income inequality has risen sharply,” says economist Achim Truger. “Politicians redistributed tax law from bottom to top. Both should be corrected. A tax reform should burden upper incomes a little more and lower incomes less.”
Left parliamentary group leader Dietmar Bartsch explains: “We want to relieve the real service providers of the country – the nurse, the parcel delivery or the bus driver. For those who keep the country running, the Union and FDP have nothing to offer in terms of taxation. On the contrary: For With normal wages, Armin Laschet could become a very expensive chancellor. ” With a view to a possible red-red-green alliance after the election, he says it is good that the SPD and the Greens wanted to relieve small and medium incomes. But you still have to do more to counter rising energy costs. “A center-left alliance should be a government that relieves the majority and protects against rising costs.”
The FDP is sticking to its tax plans
The economist Andreas Peichl criticizes the Left’s plans to increase the top rate of income tax to up to 75 percent: “An increase above 50 percent does not make sense for reasons of efficiency,” said the head of the Ifo Center for Macroeconomics.
“The Free Democrats want to relieve all income groups equally. Be it singles, single parents, married couples with or without children, self-employed or entrepreneurs,” claims FDP General Secretary Volker Wissing. However, the calculations of the ZEW show something else: According to the plans of the FDP, high earners from 8,000 euros gross per month up to six times better than small and medium incomes.
The FDP does not want to revise its tax plan. Instead, Wissing criticized the fact that the ZEW calculations did not take into account the fact that the minimum wage of twelve euros proposed by the SPD, the Greens and the Left could generate unemployment – nor that relief could stimulate the economy through higher purchasing power. However, such effects can hardly be predicted economically in detail in calculations. When the minimum wage was introduced in Germany, for example, FDP politicians warned that it would promote unemployment – but unemployment rates fell in the following years.
In the case of the FDP and the Union, the question of financing also arises. You are committed to the debt brake, want to rule out tax increases and return to the black zero as quickly as possible. They want to achieve the additional expenditure of over 30 billion euros from their tax and financial plans through growth.
SPD chancellor candidate Scholz, as Federal Finance Minister, knows the financial situation up close. “We took out an additional 400 billion euros in loans for the federal budget, among other things, to support companies in the pandemic. Therefore, now is not the time to lower taxes for profitable companies. Tax cuts of 30 billion euros for very high-earning, mostly large companies such as the CDU / CSU suggest they do not go there. The Union is also isolating itself internationally, we are currently ensuring a global minimum taxation for corporations. “