(de-news.net) – Thorsten Frei, Minister of State at the Federal Chancellery and member of the Christian Democratic Union (CDU), has issued a cautionary statement regarding proposals to increase the wealth tax. He contended that such measures would disproportionately impact medium-sized enterprises, which constitute a substantial portion of the German economy. Frei criticized the prevailing public discourse for its narrow focus on affluent individuals, noting that over 75 percent of German businesses are structured as partnerships and therefore subject to income taxation. He argued that heightened taxation on economic activity would be counterproductive, particularly in the context of prevailing fiscal challenges.
Despite the Social Democratic Party’s (SPD) advocacy for increased taxation on high-income earners, certain CDU representatives, including Dennis Radtke, Chairman of the Christian Democratic Workers’ Association (CDA), have suggested moderate adjustments to the wealth tax, coupled with relief for middle-income groups. Frei maintained that the existing tax framework already embodies the principle—shared by both parties—that individuals with greater financial capacity should bear a proportionally higher fiscal burden. He underscored the importance of bipartisan cooperation in addressing complex economic issues and called upon Finance Minister Lars Klingbeil (SPD) to present constitutionally sound budgetary proposals.
Concurrently, Federal Labour Minister Bärbel Bas (SPD) has introduced a draft regulation aimed at increasing social contributions for high-income earners. In alignment with wage growth, the proposal seeks to raise the contribution thresholds for statutory health and pension insurance. Specifically, the monthly ceiling for health insurance contributions is set to increase from 5,512.50 to 5,812.50 euros in 2025, while the pension insurance threshold will rise from 8,050 to 8,450 euros. Additionally, the compulsory insurance limit is projected to reach 6,450 euros by 2026. These adjustments are derived from a fixed formula linked to an increase in gross wages of 5.16 percent recorded in 2024, thereby ensuring proportional contributions and entitlements without discretionary intervention.
