The Free Democratic Party (FDP) has outlined a new comprehensive tax reform, aiming to deliver the quickest impact on growth and employment among all necessary reforms. The proposal, reported by “Handelsblatt”‘s Monday issue, is the product of long‑time FDP finance expert and honorary party chairman Hermann Otto Solms and will be incorporated into the party’s new program.
“Relief for individuals and businesses”
The plan calls for broad tax relief for citizens and firms and a reduction of bureaucratic obstacles.
“Income‑tax reform:”
The reform targets a “relief for individuals earning between €15,000 and €75,000 a year” the document states. A four‑tier tax rate would be introduced: 15 %, 25 %, 35 % and 42 %. The top marginal rate would remain unchanged at 42 %. The party also intends to keep the 45 % “rich tax” that applies to annual incomes above roughly €278,000, and it will preserve the joint‑taxation mechanism for married couples.
“Corporate‑tax reform:”
Company taxes would be lowered to 20 %, a level the FDP says is required to remain competitive internationally. At present the combined corporate and trade‑tax burden sits at about 30 %.
By simplifying the tax code and lowering rates for both individuals and firms, the FDP hopes to stimulate investment, create jobs and spur economic expansion.