The German Federal Ministry of Finance says it does not know which population groups have actually benefited from the tax cuts introduced by the current black‑red coalition, nor which have not.
This is clear from two almost identical letters the ministry sent to the Left‑party Bundestag representative Doris Achelwilm, reported by the Süddeutsche Zeitung.
In one of the letters, the ministry states that it has “no insights in the sense of the question”.
Achelwilm had asked the ministry to provide data on how the so‑called “Investitionssofortprogramm” (the so‑called growth booster) and the 2025 Tax Adjustment Act have affected different income groups-average earners, low‑income workers, and high‑income earners.
The growth booster aims to jolt the economy back into motion. It expands write‑off options for companies and gradually lowers corporate tax. The tax act re‑introduces the VAT privilege for hospitality and lifts the distance allowance for commuting.
Researchers at the German Institute for Economic Research (DIW) had already warned months earlier that the primary beneficiaries of the growth booster are likely “the rich and the ultra‑rich”. Companies are almost always owned by households with high incomes and wealth. DIW calculates that 69 % of the relief-almost €20 billion-will land in the hands of households with a gross annual income above €180 000, i.e. the top 1 % of the population.
Because the Left party cannot accept the Ministry’s claimed lack of insight, Achelwilm and her colleagues will submit a bill this week demanding that every future tax law undergo a “distribution check”. Unlike current practice, the draft would require the government to detail not only the fiscal and bureaucratic impact of a measure but also its distributional effects.
Specifically, the Left wants data that splits the tax relief or burden between businesses and citizens, shows outcomes for all ten income groups, and indicates effects on the 5 %, 1 %, and 0.1 % richest households-following Sweden’s model, where such analyses have been standard for years.
“Time is up to make visible which income groups are being tax‑incentivised or relieved, and by how much” Achelwilm told the SZ. The current coalition of CDU, CSU and SPD has so far lifted only “upwards”. “Low‑ and middle‑income households hardly appear in the multi‑billion‑pound relief packages, while firms and the super‑rich appear to have benefited greatly” she said, noting that she is also vice‑chair of her parliamentary group on the finance committee. “We want such effects transparently presented. Methodologically, it is doable without large effort and is already common practice in other countries”.