The premier of Bavaria, the premier of Hesse, and the CDU’s leading candidate in Baden‑Württemberg have called for a fundamental overhaul of the Länderfinanzausgleich (inter‑state fiscal equalisation).
In a guest column for the “Frankfurter Allgemeine Zeitung” (Friday edition), Markus Söder, Boris Rhein, and Manuel Hagel wrote that while Berlin or Bremen’s coffers remain open to ever‑new social gifts, the south must cut back. “We must reform this system fundamentally – with a clear rule: aid only in return for reforms” they added.
The three union politicians also demand a “cap on the burden borne by donor states and clear reform incentives for recipients”. Extra funds for receiving states should be tied to progress in local economic development. “Those who live permanently on the expense of others, without strengthening their own tax base, have misunderstood cooperative federalism” Söder, Rhein, and Hagel say.
They describe the current system as a one‑sided circle of redistribution. Baden‑Württemberg, Bavaria, and Hesse account for over 99 % of the total Länderfinanzausgleich. For those shouldering the system’s burden largely on their own, it is mandatory to articulate their own interests and conditions clearly.
At the same time, the trio urge the transfer of authority over land transfer tax and inheritance tax to the states. “True subsidiarity needs real tax sovereignty” they argue. They reject the left-wing call for higher inheritance tax, calling it a poison for business. Any tax hikes demanded during a business crisis will only reduce revenue. The politicians call for “tailored solutions close to the middle class, not rigid universal models”.