Inflation is rising - and at the same time, according to Finance Minister Lindner, the basic allowance and the income limits for the top tax rate. He also wants to gradually increase child benefit. Cost point: ten billion euros in the coming year and four billion in the following year.
According to "Spiegel", Federal Finance Minister Christian Lindner is planning a new relief package for the coming year. As the magazine reports, it should have a volume of 10.1 billion euros. Not only should the inflation gains of the Treasury be returned from this year, but the child benefit should also be increased. For 2024, it envisages a further relief step of around 4 billion euros. Lindner wants to present the concept this week.
It is therefore planned that the basic allowance, which describes the tax-free subsistence level, will increase from the current EUR 10,348 to EUR 10,633 next year and to EUR 10,933 the year after that. The top tax rate, which currently applies to taxable income of EUR 58,597, will only apply to EUR 61,972 in 2023, and EUR 63,521 a year later. Lindner assumes an inflation rate of almost 6 percent for this year and 2.5 percent for the next.
The child benefit for the first two children will increase by 8 euros in 2023 to 227 euros per month. For the third child, parents get 2 euros more, then also 227 euros. For the fourth child it remains at 250 euros. In the following year, the child benefit for the first three children increases again by 6 euros.
According to Lindner's plans, citizens with very high incomes will not benefit to the full extent. The reason: The Minister of Finance does not want to adjust the income limit above which the so-called wealth tax rate of 45 percent applies. This means that income components that exceed 227,826 euros are not relieved. Lindner had already confirmed this in the "Handelsblatt". He said: "Unlike my social-democratic predecessor, I would not change the benchmark for the tax on the wealthy."
The federal and state governments each share half of the burdens. In his draft budget for 2023, Lindner has already made provisions for the tax shortfall.
