Pensioners are paying more and more income tax. Thus, in 2015, about 34.65 billion euros of income tax paid by taxpayers with pension income to the state, as a response of the Federal Ministry of Finance to a request from the left in the Bundestag shows. The year before, it was only 31.44 billion euros - 2005 still 15.55 billion euros.
The fact that the total income tax payable by pensioners increases every year is, to a large extent, also due to the specific form of pension taxation: the proportion that new pensioners have to pay tax increases every year. Every year, the proportion that employees can deduct from their pension contributions increases.
Only since 2005 are statutory pensions taxable at all. The taxable portion of the pension was 50 per cent for those who retired in 2005 or earlier, and has since grown by two percentage points each year. Those who retire in 2020 will have to pay tax on 80 percent of their pension. After that, the share will be increased by one percent each year until by 2040 new payers will have to pay the full amount.
While total tax revenue increased by about 50 percent between 2005 and 2015, retirees' income tax income was around 130 percent.
Nearly five million seniors currently affected by pension tax
Left-fraction leader Dietmar Bartsch described the development of pension taxation as problematic. "If nothing is changed here, more and more pensions will be tax-sensitive," said Bartsch. "For low pensions we need special protection." Bartsch demanded an increase in the basic tax-exempt amount, "so that in any case even small pensions will in fact decline further."
The pension tax levied since 2005 currently affects approximately 4.98 million senior citizens - almost twice as many as in 2005. As a result of the rising taxable portion of the pension and pension increases, more and more new borrowers are being asked to pay by the Treasury.
Whether seniors have to submit a tax return depends on the amount of their taxable income in total - in addition to pension income and other income such as income from investments, rental income or occupational pensions. It is due when the total income of a pensioner above the basic allowance of currently 9168 euros and 18.336 married couples.
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