Status: 10/24/2022 7:24 p.m
Finance Minister Lindner wants to increase the basic tax allowance in the coming year more than initially planned. Income tax should only be due from 10,908 euros. The background is the high inflation.
The Federal Ministry of Finance wants to relieve taxpayers in the coming year more than previously planned. The basic allowance, i.e. the income up to which no tax has to be paid, should increase by 561 euros to 10,908 euros. This is reported by several media unanimously. The child tax allowance should therefore be increased by 404 euros to 6024 euros.
Fairness for all sides
In 2024, the tax-free allowance for around 48 million taxpayers is set to rise again. The Ministry of Finance is thus going a step further than originally planned. The cabinet decided in mid-September to raise the basic allowance to EUR 10,632.
“If the standard rate of citizen income increases in January, then the basic allowance for wage tax must also increase,” Finance Minister Christian Lindner (FDP) told the “Bild”. “Benefit recipients and working taxpayers alike deserve fairness.”
High inflation rate
The background to the tax relief is the high rate of inflation. Higher inflation rates reduce the purchasing power of consumers because they can afford less for one euro. They also lead to the so-called cold progression. This is a kind of creeping tax increase: people continue to pay high taxes even though purchasing power is falling due to inflation.