German Finance Minister Christian Lindner announced on Wednesday that Berlin would adopt a series of tax measures amounting to 10 billion euros in 2023 to mitigate the soaring prices.
This package of measures consists in particular in raising the level from which the maximum income tax rate of 42% will apply and increasing the amount of family allowances allocated, he said, stressing that the government was "
forced to act
" in the face of rising prices, particularly those of energy.
These measures are also intended to compensate for
the "multiplier effect
" whereby a person moves to a higher tax rate due to a salary increase to compensate for the effects of inflation, and therefore ultimately sees their power purchasing decrease.
Temporary measures like a “9 euro ticket”
If nothing is done, some 48 million people will suffer a tax increase from January 2023 because of this phenomenon, said Christian Lindner.
"
For the state to benefit (from an increase in tax revenues) at a time when daily life has become more expensive (...) it is not fair and also dangerous for the economy
", he said. admitted at a press conference.
“
For many people, everyday life has become much more expensive.
We fear an increase in the prices of gas, energy and foodstuffs
”, explained the minister of the coalition government of Olaf Scholz.
"
Our country's economic outlook has also become more fragile and economic growth forecasts need to be revised downwards
," he added.
Inflation reached 7.5% in July, down from June but still at a very high level due to the war in Ukraine.
The government has already adopted measures to support purchasing power, including temporary measures to reduce household energy bills such as a "
discount at the pump
" and a "
9 euro ticket
" per month valid on all public transport off high-speed lines until the end of August.