The new traffic light government has not even started, but some believe they already know: The FDP dominates the larger partners, it is said. No speed limit. No higher top tax. No wealth tax. Well, however economists have calculated the coalition agreement for the first timeLo and behold: a lot of things are going the way the FDP just doesn’t want them to. That’s a good thing.
What do the traffic light plans mean financially for every citizen? This has been examined by the Center for European Economic Research. Central result: low-wage earners and the lower middle class are the winners, including many families with children. People with little money benefit more than any other part of society. And there are good reasons for that. People with little money have had a particularly difficult time in the past few decades. The trend towards low-wage jobs, the escape of companies from collective agreements, the dismantling of the welfare state, the elimination of factory work through globalization and machines – all of this affects her particularly.
It is no political coincidence that traffic lights do better for people with little money. Higher minimum wages and basic child security are explicitly aimed at these groups. This represents a change of course, because the governments of the past decades have increased the division of the country. Abolition of the wealth tax, lowering of the top tax rate, less taxes on investment income – those who already have benefited from this in particular. For many low-wage earners and parts of the middle class, however, taxes rose.
The traffic light government is trying to break this trend towards inequality. If it goes ahead with its plans, millions of citizens will escape the poverty trap in which they are trapped today. With too little money for a decent apartment, a vacation trip or tutoring for the children.
At this point it should be noted that this change of course by the new government does not correspond to the priorities of the FDP. Above all, the Liberals wanted additional tax cuts for high earners. Had the FDP prevailed, households with an annual income of € 100,000 or more would have benefited four to six times as much from government plans as people with little money. The FDP agreed on this in the election campaign with the CDU / CSU. Calculations show that the plans of a black and yellow government would have widened the social divide in the country.
The Ampel coalition is now clearly differentiating itself from this – and this is due to the SPD and the Greens, the parties supposedly dominated by the FDP. However, plans are one thing, laws are another. People with little money will only become winners in the change of government if the traffic lights implement their plans. And that costs money, at least in the case of basic child benefits.
It could take revenge for the FDP to put a financial straitjacket on the new government. No higher top tax, no wealth tax, strict debt brake: This also means that some projects in the roughly 180-page coalition agreement cannot be paid for. Now the SPD and the Greens should make sure that not exactly those things like basic child benefits are saved, which are necessary for a change of direction to more social justice.
Politically, it would be the right thing to do anyway if the traffic lights didn’t just focus on the coalition agreement. Because some things are missing in their plans that would be important for the social statics of the republic. For example, strengthening the middle class as a whole, for example through targeted tax cuts. The middle has shrunk since the 1990s. It is of enormous importance in order to keep the German citizens motivated in their stressful professional life – as a class to which everyone belongs or to which they want to move up because it promises a life of prosperity.
Yes, such tax cuts are not part of the coalition agreement. But a politician once said: “The coalition agreement is not a Bible.” It was the last SPD chancellor so far, Gerhard Schröder. Perhaps not a bad role model for Olaf Scholz.