SPD's proposals for tax hikes met with opposition from Söder, who firmly refused to entertain such ideas. - "Southern resists SPD's proposals for tax hikes"
In a recent interview for ZDF's "Berlin direkt," Markus Söder, the CSU leader, expressed his reservations about a proposed tax increase by the SPD. The interview, conducted on Sunday, comes amidst the first months of the black-red coalition, which consists of the SPD and the Union.
Söder, the Bavarian Minister-President, criticized the coalition for postponing the re-staffing of judicial posts at the Federal Constitutional Court due to reservations from the Union against an SPD candidate. He referred to this decision as a "own goal."
However, the debate about tax increases continues within the context of the coalition agreement between the SPD and the Union. The SPD has proposed a plan to increase taxes for the long-term financing of health, care, and pension insurance. However, this proposal contradicts the agreed-upon debt increase of up to 500 billion.
Söder, in his interview, emphasized fiscal responsibility and social justice through targeted spending rather than broad tax hikes. He stated that it is not serious to propose tax increases while taking on such a large debt.
Recent reports suggest that the coalition is avoiding new energy tax cuts promised in the coalition treaty due to lack of funds, redirecting money instead to pension increases for mothers. This reluctance to reduce existing taxes despite economic pressures indicates the coalition’s preference for maintaining fiscal balance and avoiding additional burdens on consumers and businesses.
Chancellor Merz (CDU/CSU) is also pushing for tax relief for businesses and investment incentives, further indicating the coalition’s preference for tax cuts or freezing tax increases rather than introducing new taxes.
SPD politicians have recently warned against ruling out tax increases, suggesting possibilities for a digital tax or an increase in the wealth tax. However, Finance SPD co-chair Lars Klingbeil acknowledges the need for saving and budget discipline to handle increasing debt service costs, but there is no indication of support for new tax initiatives like wealth or digital taxes in this cycle.
Therefore, Söder's message in the summer 2025 interview likely reflects CSU skepticism of digital or wealth tax hikes, in line with the coalition’s broader avoidance of tax increases and prioritization of social justice measures within existing budget constraints. The planned shift in direction on migration, economy, and foreign policy is progressing, according to Söder, but the debate about tax increases and debt continues to be a contentious issue within the coalition.
I am not sure if the coalition will agree to digital or wealth tax hikes, as Söder's message in the summer 2025 interview suggests CSU skepticism and the coalition's broader avoidance of tax increases. The debate about tax increases and debt continues to be a contentious issue within the black-red coalition, as policy regarding digital tax and wealth tax is yet to be clear.
