SPD Ties Income Tax Reform to Conditions Amid Rising Union Conflict

SPD Ties Income Tax Reform to Conditions Amid Rising Union Conflict

The debate over income‑tax relief is now turning into a new clash between the Union party and the Social Democrats. Sebastian Roloff, the SPD’s economic‑policy spokesman, told the “Handelsblatt” (Monday edition) that he welcomed the CDU’s recognition of the need for changes to the personal income tax, but he wants much steeper rates for the richest earners and still opposes tighter rules on “civic wage” income.

Roloff praised the CDU for acknowledging the urgency of action on the income tax. He said a relief for small and middle‑income earners is essential, arguing that it would boost purchasing power, stimulate demand and thereby spur economic growth.

Carsten Linnemann, the CDU’s general secretary, had proposed raising the top‑rate threshold from about €68,000 to €80,000 a year. The aim is to flatten the “middle‑class stomach” in the tax schedule, a change the CDU expects to complete by mid‑legislature. Roloff said shifting the threshold could be part of a broader package, but only if it is combined with higher contributions from peak earners. “A shift of the top‑rate threshold as part of a larger measures package could make sense for middle incomes” he explained, adding that high earners still need to pay more, perhaps with a higher top‑rate.

Roloff was sharply critical of Linnemann’s plan to tighten rules on additional earnings under the upcoming citizen‑wage reform. “The proposal to account for additional earnings on the citizen wage is not coherent and would reduce the hours people work” he remarked. Instead, he argued for incentives to work more, if possible.