The German “Handelsblatt” reports that the Union-CDU and CSU combined-has apparently moved away from a categorical “no” on raising the top income‑tax rate. According to party and parliamentary groups, the change would only be acceptable if the measure were part of a comprehensive tax overhaul that delivers substantial relief for most taxpayers.
Economist Stefan Bach of the German Institute for Economic Research recently put forward a proposal along those lines. He argues that the so‑called “middle‑class tax bump” (the steep increase for medium‑income earners) should be eliminated, and that the solidarity surcharge should be abolished entirely. In exchange, he suggests raising the top tax rate from 42 % to 49 %, but applying the higher rate only to annual incomes exceeding €90 000.
The Union’s finance spokesman Fritz Günzler told the newspaper that Bach’s concept is “moving in the right direction” and could help spark a much‑needed debate on reforming the income‑tax scale. Günzler said the Union seeks “a tangible relief for low‑ and middle‑income families” and that a higher top rate would be part of that shift.
Florian Dorn, a CSU parliamentarian who sits on the finance committee, also expressed support. “This is a concept that could serve as a solid foundation for a bold income‑tax reform within the coalition” he said. “Almost everyone will have more money in the pocket, especially the middle class, which will feel a noticeable lift”.
Within the leadership circles of both parties, several members now seem open to discussion. Some have noted that a top‑rate increase might be necessary to secure a large‑scale tax reform.
Günzler has also ruled out tightening inheritance tax or introducing a wealth tax to fund the reforms, calling both measures “ill‑timed” and likely to add further uncertainty to an already fragile economy. Instead, he advocates for budget cuts and the elimination of subsidies, and he even hinted at a moderate rise in the value‑added tax. “I personally could see a modest increase in the VAT” Günzler added.