Following the federal government’s failed proposal for a €1,000 “relief bonus” at the Bundesrat (Federal Council), Green Party parliamentary group leader Katharina Dröge is demanding tax relief on income tax.
Speaking to the Funke-Mediengruppe newspapers, Dröge stated that reforming the income tax is sensible, particularly when it provides targeted relief to lower and middle-income brackets. She proposed increasing the basic allowance by €500 and raising the employee flat-rate allowance to €1,500. At the same time, she argued that extremely high incomes should contribute more significantly to funding the common good.
Dröge pointed out that the Bundesrat vetoed the bonus on Friday, an event she said necessitates a lesson for the federal government. She urged Martin Merz and Lars Klingbeil to use this opportunity to reconsider their approach. “It is finally time for sensible crisis policy that specifically and fairly relieves both people and companies” she stated in the group’s capacity.
Furthermore, Dröge called for the elimination of the electricity tax, claiming this measure would benefit both families and small and medium-sized enterprises, while simultaneously providing a strong incentive to switch to climate-friendly technologies. She criticized the government for failing to implement a reduction in healthcare contributions, calling it a “big mistake and unfair” as this measure would help the lowest earners the most.
The coalition government-including representatives from the CDU (Friedrich Merz) and SPD (Lars Klingbeil)-had initially aimed to allow employers the option of voluntarily paying up to €1,000 to their employees tax-free over a specific period. This expenditure was intended to be deductible as a business expense by the companies, with the state partly participating in the ‘bonus’ through this mechanism. However, the Bundesrat rejected the plan on Friday. Only four out of the sixteen states approved the measure, which had already faced criticism from various economic representatives.
Weekend statements from CSU leader and Bavarian Minister-President Markus Söder, alongside Mecklenburg-Vorpommern Minister-President Manuela Schwesig (SPD), also advised dropping the bonus concept and advised against convening the conciliation committee between the Bundestag and the Bundesrat.