Taxes: Lindner explains inflation compensation for “working middle”

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Lindner explains inflation compensation for “working middle”

Federal Finance Minister Christian Lindner has defended the planned tax inflation adjustment for people who do not receive special social benefits.

In view of the enormous price increases, it is only fair that “the working middle of society” is also considered, said the FDP leader on Thursday when introducing a draft law in the Bundestag. The law is of particular importance because it maintains purchasing power and ensures that actually stable sectors such as trade and services are not additionally infected by the crisis.

The plans put in place by the cabinet aim to cushion the impact of inflation on income taxes. Among other things, the basic allowance is to be increased next year, i.e. the income up to which no tax is paid. Other key values ​​of the tax tariff are also to be shifted in order to compensate for the effect of the cold progression. This is a kind of creeping tax increase when you continue to pay high taxes even though purchasing power is falling due to inflation. In the future, the top tax rate will also only apply to higher incomes.

Lindner appeals to the countries

Lindner appealed to the states to agree to the plans. “It is unacceptable for the state to benefit from inflation while families no longer know how to make ends meet with their income.” What applies to the federal government must also apply to the states. Funding needs are not just for the state. With the law, the federal government also wants to raise child benefit and the child tax allowance.

Support in principle came from the opposition, but there was also criticism. Union parliamentary group leader Mathias Middelberg (CDU) called the state’s “return of excess profits” due to inflation a good building block in the relief package. The law will only take effect next year, and the federal government will keep ten billion euros from this year.

dpa