Jens Spahn offers SPD joint proposal for income tax reform

CDU parliamentary group leader Jens Spahn has proposed that the SPD jointly develop a draft for income tax reform. The aim is to relieve small and medium incomes without public disputes.

Spahn stressed in the Rheinische Post that both parties agree on the goal. He suggested presenting the proposal jointly to avoid conflicts. Finance Minister Lars Klingbeil had previously announced the reform on the coalition's anniversary and emphasized that it must be budget-friendly.

Spahn warned against excessively high tax rates for top earners as a counter-financing measure. Instead, funds outside the tax system are needed. He also rejected suspending the debt brake and pointed to the federal government's AAA rating.

In the coalition agreement, the Union and SPD had committed to lowering income tax for small and medium incomes in the middle of the legislative period. SPD parliamentary group leader Matthias Miersch had previously considered a possible suspension of the debt brake in case of a prolonged Iran crisis.

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Politicians Manuela Schwesig and Markus Söder advocating for tax reform in the German parliament following the rejection of a relief premium.
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Politicians call for tax reform after Bundesrat rejects relief premium

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After the Bundesrat blocked the planned tax-free relief premium of up to 1,000 euros, leading politicians are urging a comprehensive income tax reform instead. Manuela Schwesig (SPD) and Markus Söder (CSU) described the premium as failed.

Leading CDU politicians reject the SPD proposal to suspend the debt brake and demand a savings package from Finance Minister Lars Klingbeil (SPD). Tensions in the black-red coalition are rising as Klingbeil prepares the key points for the 2027 budget. The trigger is SPD parliamentary leader Matthias Miersch's push amid the ongoing Iran crisis.

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Germany's black-red federal government aims to pass a package of reforms covering taxes, the labor market, pensions and bureaucracy reduction before the summer break. A further coalition committee meeting shortly before the parliamentary summer recess in early July is set to make the decisions. Chancellor Friedrich Merz will invite social partners to the chancellery in early June.

Germany's finance ministry opposes Economy Minister Katherina Reiche's proposal to cut the electricity tax for businesses and households. The dispute in the black-red coalition over relief from high energy prices is escalating after Reiche and Finance Minister Lars Klingbeil clashed on Friday. Chancellor Friedrich Merz has expressed annoyance at Reiche's push.

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The SPD parliamentary group has opposed flat cuts to parental allowance. Family Minister Karin Prien of the CDU faces pressure to save 500 million euros.

Days before the planned cabinet decision, the SPD warns against overburdening insured individuals with Health Minister Nina Warken's savings package. The SPD demands more cuts from pharmaceutical companies and efficiency measures. The Greens have presented their own counter-concept.

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Sepp Müller, deputy leader of the Union parliamentary group, deems comprehensive subsidies against high fuel prices unrealistic. Eastern German CDU state premiers demand suspension of the CO₂ tax. Care associations warn of impacts on rural patient care.

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