Germany's SPD pushes bold tax reforms amid economic slowdown and Iran tensions
Despite Germany's sharply downgraded growth forecast, the Social Democrats (SPD) remain committed to their demands for higher taxes on top earners, the wealthy, and inheritances.
"The SPD is linking tax fairness with fiscal consolidation to give Germany a new growth model: our tax system is stuck in the past," SPD parliamentary group deputy leader Wiebke Esdar told the Rheinische Post (Wednesday). "Those with little pay too much, while those with a lot pay too little. This system is unjust, and it undermines our economic strength," the SPD politician said. For this reason, she argued, the first step should be an income tax reform that would relieve 95 percent of employees. "Higher earners can be asked to contribute more—and that includes us as lawmakers," Esdar added.
At the same time, she stressed, those with greater means must shoulder more of the burden to ensure the state remains capable of action. "We reject any increase in value-added tax—it would hit precisely those who already have to stretch every euro. It would also reduce domestic demand, which would further harm our economy at a time like this," Esdar said.
"Before we even consider such a measure, we must first explore alternatives, such as reintroducing a wealth tax on multimillion- and billion-euro fortunes, reforming inheritance tax to make it fairer, or overhauling capital gains taxation," she explained. The SPD also takes spending cuts seriously, she noted. Economic research institutes have meanwhile slashed their growth forecast for this year to just 0.6 percent due to the Iran conflict.
