Ifo chief Clemens Fuest warned the coalition parties against raising the top tax rate.
He told the “Rheinische Post” that increasing the peak rate would impose negative effects on economic growth, especially because it would burden firms that are organized as partnerships. Moreover, simply raising inheritance tax, he argued, is not a viable solution: a realistic overhaul of that tax would not raise enough revenue to support a meaningful income‑tax cut.
Fuest added that those who want to cut taxes must first cut public spending. While it is theoretically possible to lower taxes first, borrow new money, and then force a sharp cut in expenditures, the federal debt‑brake limits how much borrowing can be done. Therefore, the priority must be to reduce spending before any tax cuts are considered.