Tax reform of the federal government: more money for families and pensioners!

Tax reform of the federal government: more money for families and pensioners!

On March 31, 2025, the coalition negotiations between the CDU, CSU and SPD are in full swing. The discussions focus on numerous essential topics, including pensions, taxes, child benefit and various funding programs. Currently there is also a debate about possible tax increases for high earners to ensure the financial stability of the country.

The income tax is the focus of these negotiations. The Union proposes to raise the income limit for the top tax rate to 80,000 euros, while the SPD favors an increase to 83,600 euros. In addition, the SPD plans to increase the tax rate for high income from 42 to 47 percent and to reform the rich tax. With regard to the commuter flat rate, there is a proposal for raising, but there are still no precise details.

asset and pension policy

Another central topic is asset tax. The SPD calls for the introduction of a new asset tax and a review of the exceptions to inheritance of companies, while the Union categorically rejects this proposal. Furthermore, the SPD would like to increase the compensation tax to private capital income from 25 to 30 percent.

In pension policy, the SPD strives to keep the pension level of currently 48 percent. The Union, on the other hand, is committed to improving the mother's pension. A dramatic increase in the contribution rate could be up to 22.9 percent by 2040, which would be a significant burden for many citizens.

health and social benefits

Another keyword in the negotiations is health insurance. Additional tax billions are discussed here to avoid contributions in statutory health insurance. In the area of child benefit, the Union plans an increase in child benefit bonus for the third child and other children, which is not supported by the SPD.

Tenancy law is another point of discussion. This examines whether fines are introduced for landlords that violate the rental price brake. While the SPD strives for stronger restrictions on rent increases in popular residential areas, the Union rejects this.

further changes in tax law

In addition, there are numerous tax changes that are to come into force from 2025. The basic allowance is raised by EUR 312 to 12,096 euros, while the child allowance increases by 30 euros to EUR 3,336 per parent. In addition, the child benefit will be increased to 255 euros per child in January 2025, with further raising in the following years.

The government also plans a reform of the solidarity surcharge, whereby the exemption limit is raised to 39,900 euros. The deduction for childcare costs should also be increased to 80 percent of the expenses, with a maximum amount of 4,800 euros per child.

The tax exemption of the subsistence level and changes in procedures for inheritance taxes are also part of these comprehensive reforms. The inheritance cost lump sum is raised from 10,300 euros to 15,000 euros, which is a significant relief for many families.

For further information on the tax changes and their effects, you can Federal Finance Ministry.de and dailychau.de visit. You can also find detailed reports on the coalition negotiations on radioleverkusen.de .