Christian Lindner's plan to abolish solidarity is facing headwinds in the traffic light coalition

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Finance Minister Christian Lindner (FDP)

Photo: Ann-Marie Utz/dpa

Finance Minister Christian Lindner (FDP) and Economics Minister Robert Habeck (Greens) agree on tax relief for companies. But opinions differ in the traffic light coalition as to how this should succeed. Lindner's proposal to abolish the solidarity surcharge for companies met with little approval from his coalition partners. SPD leader Saskia Esken does not believe the plan can be financed, as she said after a meeting of the SPD executive committee in Berlin. Green Party leader Ricarda Lang also rejects the proposal.

Last week, Habeck spoke out in favor of a corporate tax reform in order to relieve the burden on companies in Germany. To this end, he brought up a special fund to relieve the burden on the economy and companies. “I also see that overall we have corporate taxation that is no longer internationally competitive and investment-friendly enough,” Habeck told “Welt am Sonntag.”

Finance Minister Lindner then proposed abolishing the solidarity surcharge for companies. When analyzing the situation, he agreed with Habeck, said Lindner on Sunday evening on ARD. “If we really want to do something about the tax rates,” then “the easiest and quickest way is to abolish the solidarity surcharge.”

Support came from the FDP

The leaders of the SPD and the Greens criticized the plan on Monday. It's about 30 billion euros that would be missing from the federal budget as a result of such a step, said Esken. She is of the opinion that this cannot be financed in the budget. "In this respect, I don't see the suitability of this proposal." Lang said that abolishing the solidarity surcharge would not ensure the necessary private and public investments. Her party colleague Habeck made a “concrete suggestion” as to how this could be achieved.

Lindner received support from the ranks of his own party. FDP General Secretary Bijan Djir-Sarai called the proposal “sensible.” “That would not be something that would be a burden on the states, but rather something that the federal government alone would ultimately have to regulate,” Djir-Sarai told the broadcasters RTL and n-tv. Djir-Sarai rejected Habeck's proposal for special funds: “These are debts. We don’t think much of that.”

Since a tax reform in 2021, only companies and those earning high incomes above an allowance have paid the solidarity surcharge. According to calculations by the employer-related Institute of the German Economy (IW), the state will receive twelve billion euros from the solidarity surcharge this year. Seven billion of these are paid by companies.

czl/AFP