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The traffic light coalition has launched the first tax relief law. It envisages raising the employee lump sum for income tax and the basic allowance.
Secure the citizens more money in their wallets and companies more liquidity, says Federal Finance Minister Christian Lindner in the Bundestag.
On Friday, the Bundestag debated the draft of the traffic light coalition for a tax relief law in the first reading. “We ensure that citizens have more money in their wallets and that companies have more liquidity,” said Finance Minister Christian Lindner introducing the project. In view of a situation characterized by a high level of uncertainty, it is imperative for economic and political reason to strengthen growth in Germany, to counteract inflation risks and to cushion hardships, he said Lindner. The goal: more net from the gross — among other things by raising the basic allowance, employee allowance and commuter allowance. A family with two employees will save a good 500 euros in total. “In this way we support confidence in long-term good economic development.”
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Lindner explained that the coalition also wanted to dampen “the perceived inflation that people are feeling”. “But one thing is part of honesty: the state’s resources are finite.” Therefore, he must primarily turn to “those most affected” and “prevent economic structural breaks”. the in Tax Relief Act 2022 According to Lindner, the combined measures have a total volume of 4.5 billion euros.
“The draft of the law is about the citizens directly and immediately. We want to relieve them quickly and unbureaucratically. Above all, we help households that are particularly hard hit. But we also take note of the concerns of the broader center.” Lindner also announced that companies in Germany suffering from the economic consequences of the Ukraine war government aid will get. “Doing nothing is not an option in this situation,” said Lindner.
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The federal government therefore wants a multi-billion dollar “Protective shield” for companies build, which are burdened by the consequences of the Ukraine war and high energy prices. Among other things, the package of measures provides for a “temporarily limited and narrowly defined” cost subsidy to temporarily contain the costs of the increase in natural gas and electricity prices for companies that are particularly affected. Lindner said that this subsidy is expected to cost taxpayers five billion euros.
In addition, there should be a loan program for polluted companies via the state development bank KfW with a volume of up to 7 billion euros and guarantees. A financing program for companies threatened by high security payments is also planned. The federal government wants to develop standardized criteria to grant companies short-term credit lines from KfW that are backed by a federal guarantee. A total credit volume of up to EUR 100 billion is planned for this purpose.
Lindner said damage from the aftermath of the war on the German economy should be limited. “We want to cushion hardship and prevent structural breaks.” He spoke of an economic “shock absorber”. But the aid is on target, and taxpayers’ money will be used carefully. The package is easy on the taxpayer and very effective for the economy.
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Even before the start of the Ukraine war, the traffic light coalition had agreed on an initial relief package in view of the rise in energy prices. This provides for the employee lump sum for income tax to be increased by EUR 200 to EUR 1,200 and the basic allowance for 2022 by EUR 363 from the current EUR 9,984 to EUR 10,347. In 2022 alone, the traffic light coalition will relieve citizens of well over four billion euros.
The increase in the commuter allowance for long-distance commuters, which is actually only due on January 1, 2024, is to be brought forward and amount to 38 cents retroactively to January 1. This measure is limited until 2026. The coalition has now agreed on another relief package. The report on cold progression, on the basis of which the income tax rate will be adjusted to inflation developments, is expected by autumn at the latest.
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