The trip by Federal Finance Minister Olaf Scholz (SPD) to his US counterpart Janet Yellen in Washington was overshadowed by election campaign allegations from home. Immediately after his conversation with the US Treasury Secretary on Friday morning, local time, Scholz had to be questioned about the accusation that he had allowed parts of the tax relief concept, with which the SPD and Scholz want to campaign for chancellor, to be reckoned with in the ministry. The mirror had previously reported that Scholz had resorted to the expertise of his ministry in the detailed planning of the SPD tax concept and called on a state-funded institute. Specifically, it was said that two weeks ago the management level of the ministry commissioned the tax department to calculate models. If the allegation is true, it could be covert party funding.
Scholz reacted tightly at the press conference in front of the White House in the US capital when the last question was not asked about his talks with Yellen, but about the election campaign and the SPD tax concept. Is the accusation true that he is using the SPD ministry for the election campaign? “It is the finance minister’s job to deal with tax concepts,” said Scholz. The Ministry of Finance issued a statement on this. “I think that’s what you can say about it, too.” He added that ministry activities “are always organized in such a way that the minister is supported in his duties”.
A ministry spokesman said it was “customary for a ministry to prepare technical papers for the minister”. In the Federal Ministry of Finance, tax policy is one of them. Various variants of the reform of the income tax rate are currently being calculated. The ministry is working “on the basis of a framework agreement with an external institute. This serves to form the opinion of the management and is not done on behalf of or at the request of a party.”
However, the SPD is currently also working on finalizing the tax reform it has planned after the elections. According to this, small and medium incomes are to be relieved significantly in the future and high earners are burdened. Specifically, it is planned to apply the current top tax rate of 42 percent significantly later than before, at around 80,000 euros gross annual income for a single. Until then, the load would grow much more slowly than it does today. From a gross income of 100,000 euros per year, a rate of 45 percent should be due. Single top earners with an annual gross income of 250,000 or more will then be subject to a tax rate of 48 percent. The plans have not yet been finalized. A party spokeswoman said the “positions on tax policy formulated in the SPD’s future program are based on preparatory work by the Tax and Finance Commission of the SPD party executive.” The SPD “falls back on the expertise of many”.
The formation of opinions in the ministry, which is headed by the Chancellor candidate Scholz, and the creation of the SPD tax concept coincide. It’s hard to imagine that one should have nothing to do with the other. Another argument against this is that the coalition does not want to implement any more tax reforms until the federal election.
On the other hand, the Social Democrats – unlike the Greens and the Union – have been much more detailed in their tax policy demands and plans for years. This also has to do with the fact that the SPD can fall back on extensive financial policy experience. With Hans Eichel, Peer Steinbrück and Olaf Scholz, three of the last four Federal Finance Ministers came from their ranks. In addition, the co-chairman of the SPD, Norbert Walter-Borjans, was previously finance minister in the most populous state of North Rhine-Westphalia. At that time it was often said that the SPD’s tax concept was calculated in Düsseldorf.