Greens and SPD against Lindner plan
Taxpayers’ Association for complete solidarity exit
February 6, 2024, 1:21 a.m
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More than thirty years after German unification, Finance Minister Lindner wants to abolish solidarity. The coalition partners SPD and Greens are against it because billions would be missing from the budget. The FDP leader receives support from the Taxpayers’ Association and the DIHK.
The Taxpayers’ Association and the German Chamber of Commerce and Industry have welcomed Federal Finance Minister Christian Lindner’s proposal to abolish the solidarity surcharge for companies. It’s primarily about “protecting trust,” said Reiner Holznagel, President of the Taxpayers’ Association, to the Funke newspapers. “People have relied on the fact that the solidarity will no longer apply when the special financial aid for the five new federal states expires.”
The FDP politician’s initiative is right, but it doesn’t go far enough. “The solidarity should be completely and for everyone!” Many skilled workers and skilled workers would also still pay this. Even if the Federal Minister of Economics is right to demand tax relief for companies, “then the government should start abolishing solidarity immediately,” said Holznagel. “Many small and medium-sized businesses would also benefit from this.”
DIHK demands “positive tax impulses”
“The complete abolition of the solidarity surcharge or a reduction in the corporate tax rate would be important signals of relief,” said the President of the German Chamber of Commerce and Industry (DIHK), Peter Adrian, to the newspapers. “All around 800,000 corporations still pay the solos, but also many sole proprietorships and partnerships if their income exceeds the set limits.” Adrian pointed out that geopolitical crises and the transformation of the economy towards climate neutrality would pose major challenges for the economy.
“That’s why it’s important to strengthen the investment capacity of companies,” he said. “That’s why it’s so important that the federal and state governments quickly agree on the implementation of the Growth Opportunities Act.” In a first step, companies would be relieved of at least 6 to 7 billion euros. However, there are different signals from politicians and the relief volume could be smaller, he fears. “But the economy urgently needs positive tax stimulus.”
Esken and Lang, on the other hand
In the evening, Lindner renewed his push to abolish the solidarity surcharge against criticism from the Greens. Germany must be made more attractive as a location for private investments, said the FDP leader in Eschborn. “The simplest, quickest way to reduce the burden on companies in Germany would be to waive the solidarity surcharge more than thirty years after German unification.” The co-leader of the Green Party, Ricarda Lang, and Economics Minister Robert Habeck had previously rejected Lindner’s proposal. SPD leader Saskia Esken said Lindner’s plan could not be financed because of the strained budget situation.
The Soli was introduced in 1991 – a year after German unification – and was intended to help finance economic development in the new federal states. It was levied until 2020 as an additional levy of 5.5 percent on income and corporation tax in order to finance the burden of reunification. Since 2021, only top earners and corporations have to pay it. Last year, the solidarity provided the federal government with income of around twelve billion euros.