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Solidarity surcharge: Altmaier proposes "meltdown model" for soli-abolition

2019-08-16T08:23:20.911Z

TIME ONLINE | News, backgrounds and debates



Berlin (dpa) - Federal Minister of Economics Peter Altmaier (CDU) wants to create constitutional clarity with his concept for complete "soli" abolition.

The proposal states: "The abolition of the solidarity surcharge for 90 percent of the taxpayers alone is permanently constitutionally problematic and not justified." This is aimed at proposals by Finance Minister Olaf Scholz (SPD).

Altmaier proposes to phase out the solidarity surcharge by 2026 in a "meltdown model", and ultimately completely. Measures such as greater prioritization of expenditures, a "critical review" of subsidies and a reduction in federal participation are conceivable for counter-financing, according to the paper presented by the ministry on Friday.

Scholz wants to cancel the solos for 90 percent of the payer, another 6.5 percent should pay him only partially from 2021 - the higher the income, the more. A complete abolition refuses the vice-chancellor, also because they would burden the federal budget with more than ten billion euros in addition.

Altmaier said on Friday in the ZDF "Morgenmagazin" that in a partial abolition, as proposed by Scholz, half of the soli continue to be paid - and for an unlimited time and with no clear perspective on when it will be abolished. This was a significant constitutional risk.

Therefore, he made a proposal that respects the performance of public finances and that leads to "taking the problem step by step". Altmaier said he does not understand his model as an antithesis, but as an "important and clever addition to what was agreed in the coalition agreement. This is an offer also to Scholz.

It was promised to the people 30 years ago that the solos would be completely abolished when the need was eliminated, the Minister of Economic Affairs said: "We have now made available financial resources for the first step." But it must be made clear to the people, that the federal government does not stop there, that it does not come to a secret tax increase. "That would damage the credibility of politics."

As Altmaier puts it, a phasing out of the solidarity surcharge would require opening up new scope for tax cuts from initially up to around € 2.8 billion in 2021 and from 2024 to 2026 in total, a further € 12.5 billion, disregarding them of counter-financing effects.

The Scholz plans would exclude a large number of companies and freelancers, who made a major contribution to the prosperity of this country, from being relieved of their burden. "In addition, the remaining 10 percent of the payers contribute 50 percent of the total load."

Unlike Scholz, Altmaier relies on allowances for his concept. Whoever pays less than € 16,988 income tax in 2021 should not pay any more. For all others, the tax base is reduced accordingly. Despite exceeding the allowance, therefore, not all income needs to be taxed.

According to Altmaier's plans in 2024, this allowance should rise to 50,000 euros in income tax, and then capital companies should be completely relieved. According to the newspaper alone, this step would cost 7.7 billion euros - for counter-financing, Altmaier would like to examine, among other things, subsidies and the sale of federal participations. In a third stage, the solos should be eliminated in 2026 for all.

Scholz sees in his concept a tax exemption of 16,956 euros in income tax. Up to this amount, no solos should be due. If the tax threshold is exceeded, however, unlike Altmaier's proposal, one has to pay taxes on the entire income.

The parliamentary managing director of the FDP faction, Marco Buschmann, praised Altmaier's plan to abolish the solos completely, called the year 2026 as a horizon but far too late and unconstitutional - after all, the solos with the expiry of the Solidarity Pact II early 2020 completely disappear. The Minister of Economic Affairs therefore uses an old trick: «Promise something good, but move so far into the future that it does not force now and now to act. This is a transparent maneuver before the elections in the East. "

Source: zeit

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