Mmorning hour catches the worm”. According to the taxpayers’ association, the saying is rarely as true as it was this Wednesday. According to his calculations, citizens and companies have only been working for their own wallets since that day – to be precise, since exactly 3:27 a.m. Everything that they had previously earned went to the state in purely mathematical terms, as the taxpayers’ association explains. He estimates the economic burden on income for this year at 54.6 percent.
“This is the highest quota that we have ever had in the history of the Federal Republic,” stressed Taxpayer President Reiner Holznagel. As Holznagel reported, the development has to do primarily with creeping additional burdens. Only the contribution to statutory long-term care insurance was increased at the beginning of the year. Compensation of workers has grown faster than national income, which has pushed up the social security contribution ratio. According to him, sales tax and wage tax also increased faster than gross domestic product.
The cold progression is not the main problem, but the progressive structure of the income tax, said Holznagel. Cold progression means the additional burden on the taxpayer from the combination of inflation and the tax rate. A salary increase usually leads to a higher tax burden, even if the citizens can no longer afford it because of the increased prices. For a few years now, the tax rate has been adjusted regularly to compensate for this effect. But if everyone in a growing economy earns more, they slide together into a higher burden in the income tax scale. “More and more taxpayers are coming into higher progression zones,” emphasized the association’s president. This effect is particularly strong in the lower tariff range, he criticized.
Let the tax burden grow more slowly
The taxpayers’ association is in favor of a radical correction of the income tax rate. At the end of the 1950s, the top tax rate only applied to real top earners with around twenty times the income of an average earner. Today, he argues, that’s already the case with less than one and a half times the average wage. The taxpayers’ association proposes using the basic allowance of 8,820 euros as before with taxation of 14 percent, but letting the burden grow more slowly than at present. The “kink” in the tariff would then be at an income of 45,000 euros and a maximum load of 35 percent. His tariff then slowly increases further up to the top tax rate of 42 percent, which would be reached at 80,000 euros.
Image: FAZ
The tariff correction would relieve citizens and companies by 40 billion euros. In addition, there would be 20 billion euros from the elimination of the solidarity surcharge, which the taxpayers’ association is also demanding for 2020. Even then, the state would still have enough leeway to fulfill its tasks and comply with the debt brake, said Holznagel. If you just keep the tax rate for 2014 constant, you get a relief volume of more than 40 billion euros. In addition, one must talk about additional savings. “Only when the state is kept tight does it start to save and set priorities.” At the same time, Holznagel spoke of a necessary “freedom discussion” that is necessary if more than half of what they generate is taken away from the citizens .
The taxpayers’ association traditionally calculates the tax ratio differently than the Federal Statistical Office or the industrialized countries’ organization OECD. On the one hand, it also takes into account tax-like payments such as the household fee for broadcasters and the surcharge for financing electricity from the sun and wind. This increases the value in the counter. On the other hand, he does not put the forced payments of citizens and companies in relation to the gross domestic product, but instead takes the national income in the denominator. The contributions and taxes would have to be paid out of wages and profits, he argues.