(de-news.net) – General secretary of the CDU Carsten Linnemann has called for income taxes to be reduced in a clearly perceptible manner and emphasized that substantive policy progress must be achieved in this domain. He indicated that ongoing and forthcoming negotiations with the SPD should not remain narrowly confined to anticipated reform outcomes in the health care and pension sectors, which are expected to emerge in March and June, respectively. Instead, he argued that these deliberations should be broadened to encompass a comprehensive revision of income taxation. In his assessment, integrating tax reform into this wider policy agenda would be both strategically appropriate and substantively necessary, given the central role of income taxation in shaping household finances and broader fiscal policy.
Shifting top rate entry point seen as key mechanism for relief
A central pillar of Linnemann’s proposal involves raising the income level at which the top marginal tax rate begins to apply. He contended that increasing this threshold from 68,000 euros to 80,000 euros in annual gross income would directly benefit middle-class taxpayers by moderating the intensity of the tax burden within this earnings range. This adjustment, he maintained, would also address the structural distortion commonly described as the “middle-income bulge,” whereby taxpayers encounter comparatively steep marginal rates at income levels not typically associated with high earners. By shifting the threshold upward, the proposal seeks both to ease financial pressure on a substantial segment of taxpayers and to improve the internal coherence and proportionality of the tax system’s progressive structure.
Linnemann further stated that implementation should be scheduled for the midpoint of the current legislative term, thereby allowing sufficient time for the necessary political coordination and fiscal planning. At the same time, Linnemann acknowledged that any reduction in tax revenue would require appropriate and credible financing measures to ensure fiscal stability. He characterized the task of securing adequate funding as an inherent and unavoidable component of the policymaking process, emphasizing that the responsibility for maintaining sound public finances rests fundamentally with elected officials and forms an integral part of the broader reform effort.
Broader debate over incentives and inequality
Linnemann’s proposals to ease the burden of income taxation have led to tensions about fiscal distribution and labor incentives with the SPD. Sebastian Roloff, the SPD parliamentary group’s economic policy spokesperson, indicated that his party welcomed the CDU’s apparent acknowledgment of the need for reform, particularly insofar as it signaled recognition of the urgency of relieving lower- and middle-income earners. He argued that such measures would likely strengthen purchasing power, stimulate aggregate demand, and thereby contribute to economic growth. At the same time, Roloff suggested that adjusting the income threshold at which the top marginal tax rate applies could be justified, but only if embedded within a comprehensive reform package designed to support middle-income households. He maintained that any such adjustment must be accompanied by increased contributions from top earners, including the introduction of a higher marginal rate on the highest income brackets, in order to preserve distributive balance.
Roloff also rejected proposals advanced by Carsten Linnemann concerning stricter rules for supplemental earnings under the current Bürgergeld system. He contended that tighter income attribution would weaken incentives to expand working hours, whereas policy design should instead encourage greater labor participation. Carsten Linnemann, by contrast, had argued that under the existing Bürgergeld framework, recipients who work only limited hours effectively have their additional earnings fully offset against their benefits, thereby preventing any meaningful financial gain. He maintained that the structure should be revised so that increased labor participation would result in a greater share of earned income being retained, rather than neutralized through benefit reductions. In his assessment, the current rules—under which beneficiaries may keep the first 100 euros but subsequently face an offset rate of approximately 80 percent—create a disincentive to expand working hours. Linnemann therefore contended that the incentive structure must be fundamentally reversed to ensure that greater employment engagement translates into proportionally higher disposable income.
