Federal Finance Minister Olaf Scholz also wants to support the weakening economy by abolishing the solidarity surcharge for large parts of the population. The measure was "a great relief for workers, self-employed and craftsmen," said the SPD politician, pointing to the relief effect of the far-reaching eradication of most taxpayers. The economy is weakening a bit because the project is a contribution to its support.
Scholz wants to completely abolish the surcharge on income tax from 2021 onwards for around 90 percent of taxpayers. For another 6.5 percent of taxpayers it should at least be lower than before. Only top earners should then pay the solos.
This is to be achieved by a significant increase in the so-called exemption limits. Specifically, the plans mean that, for example, for a unmarried employee, the solos from 2021 up to a gross annual salary of 73,874 euros would be completely eliminated. The full supplement - currently 5.5 percent of the income tax - would have to be paid from a gross annual salary of 109.451 euros.
FDP and business see constitutional problems
The Federal Finance Minister is thus implementing the provisions of the coalition agreement. The Union and the SPD had agreed on solvency relief for "about 90 percent" of taxpayers, but not for the top ten percent of income earners. However, at its party congress in late 2018, the CDU had demanded the complete removal of the soli - also to avoid possible constitutional complaints. One of these has meanwhile been promised, among others, by the FDP and SME President Mario Ohoven.
However, Scholz rejected such objections. "The solution we propose is constitutional," he said. Incidentally, it was only fair "that we then carry the unchanged existing tasks for the financing of German unity by those who have the greatest income". In view of the economic outlook, "today is not the time" to give citizens with more than € 5 million in annual income taxes of more than € 100,000. The Secretary-General of the coalition partner CDU Paul Ziemiak said the Union relied on Scholz's plans to be judicial.
Also with regard to the avoidance of new debts Scholz sees no problems with the conversion. The abolition of the soli in parts was already taken into account in the financial planning for the next few years. "So this is financially to lift," said the Federal Minister of Finance.
However, several trade associations are calling for a complete abolition. Small companies are often organized as a partnership and then would not benefit, said the Secretary General of the Handwerkverband ZDH, Holger Schwannecke. "Relief from the solidarity surcharge must also be borne by the companies and companies, which will ultimately secure jobs and training with their economic success."
The soli should finance the special costs of reunification. He contributed just under 19 billion euros to the federal government last year. With the partial abolition of the Treasury should be from 2021 around ten billion euros missing in 2024 then a good twelve billion.