(GermanPolicy.com) – The traffic light parties (SPD, Greens, and FDP) do not want to tackle a major tax reform, all three parties announced, according to media reports. The solidarity surcharge should not be abolished, nor should other major reliefs be decided upon.

In contrast, the Institute of German Economy has proposed increasing the basic tax allowance to 10,500 Euros. The top tax rate of 42 percent should only come into effect from an income of 70,000 Euros, and a new tax rate of 44.5 percent should apply from 90,000 Euros, while for the highest incomes, instead of an 45 percent tax, a rate of 47 percent would then be deducted. Such a tax reform would relieve everyone overall, according to the institute’s researchers. The losses in government revenue would be moderate, at 17 percent per year.