(de-news.net) – Leading figures from the SPD and the CDU/CSU have articulated sharply contrasting priorities in the ongoing tax policy debate within Germany’s governing coalition. These positions underscore not only differing evaluations of the country’s current economic weakness but also fundamentally different views on how limited fiscal resources should be allocated and which groups should be targeted for relief.
Alexander Schweitzer, Minister-President of Rhineland-Palatinate and SPD vice chair, argued that tax relief for low- and middle-income earners should take precedence, provided that such measures are backed by reliable financing. In his view, a renewed cycle of public disputes among coalition partners in Berlin would be politically damaging and economically unproductive. Instead, he emphasized the need for rapid and clearly perceptible tax reductions that allow working households to feel concretely acknowledged by government policy. Schweitzer therefore called for a quickly negotiated, fiscally sound compromise that would prevent a return to the prolonged and divisive conflicts that have characterized recent months.
On the other side of the debate, several CDU/CSU figures have openly supported accelerating corporate tax cuts. This position is shared by the Rhineland-Palatinate CDU, whose state election front-runner Gordon Schnieder has aligned himself with CSU leader Markus Söder. Schnieder argued that Germany’s comparatively weak economic performance points to the limited effectiveness of existing coalition measures. From his perspective, a tangible economic recovery would require faster and more decisive tax relief for businesses, and he has pressed for an immediate discussion on bringing forward corporate tax reform as part of a broader growth-oriented strategy.
These opposing stances have resurfaced following the parties’ annual retreats, where unresolved strategic differences once again became apparent. While the SPD reiterated its preference for easing the tax burden on consumers, the Union renewed its push to advance a corporate tax cut originally scheduled for 2028. The SPD has continued to reject this emphasis on corporate taxation, maintaining that such reductions are often spread too broadly to generate meaningful investment incentives. Instead, senior party figures have criticized the federal economics ministry for insufficient progress in implementing previously agreed reforms, pointing to infrastructure expansion and lower energy prices as more effective tools for economic support. From this analytical perspective, sustainable growth would be driven by advanced technologies and substantially higher productivity rather than by extending weekly or lifetime working hours, a proposal associated with Söder that the SPD strongly opposes.
In a related fiscal debate, the SPD has also defended its approach to reforming the inheritance tax. Party representatives have argued that introducing a lifetime tax-free allowance would reduce the inheritance tax burden for the overwhelming majority of estates. At the same time, they have maintained that a revised framework for very large, multimillion-euro inheritances would promote fairness and, in the case of business successions, help safeguard long-term employment in Germany.
Adding a broader, macroeconomic perspective, Monika Schnitzer, chair of Germany’s Council of Economic Experts, has warned of substantial financing gaps in the federal budget later in the decade, which could ultimately increase the likelihood of tax hikes. She has stated that under current plans, the budget would no longer be fully funded by 2029 at the latest. According to Schnitzer, the government is placing heavy reliance on economic growth to close the emerging gap, yet the scale of growth required would be unrealistic. Even comprehensive structural reforms in areas such as health care and pensions, she noted, would merely slow the growth of expenditures rather than reduce them outright, making significant savings improbable. As a consequence, Schnitzer argued, taxpayers could eventually bear the cost of persistently high spending, leaving the government little choice but to reconsider existing measures or seriously contemplate higher taxes in the future.
