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Solidarity disaster threatens: Again, the court could cost the traffic light billions that have been budgeted for

2024-03-14T18:27:26.172Z

Highlights: Last year, a historic ruling by the Federal Constitutional Court caused a billion-dollar hole in the German treasury. Now there is a threat of new trouble from Karlsruhe. Six FDP members of the Bundestag are filing a constitutional complaint against the continuation of the solidarity surcharge. Again, the court could cost the traffic light billions that have been budgeted for. The traffic light wants to raise twelve billion from the remaining funds in 2024. The SPD, in turn, is critical of this, as are the Greens. The SDP wants to re-classify the levy into a constitutional future.



As of: March 14, 2024, 7:15 p.m

By: Christoph Gschoßmann

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The traffic light government is once again facing an ordeal.

The Federal Constitutional Court in Karlsruhe could cut billions from Berlin's budget again.

Munich – Last year, a historic ruling by the Federal Constitutional Court caused a billion-dollar hole in the German treasury.

At that time it was decided that the government would not be allowed to redistribute the billions planned for the fight against the corona pandemic in the new budget.

Now there is a threat of new trouble from Karlsruhe.

Six FDP members of the Bundestag are filing a constitutional complaint against the continuation of the solidarity surcharge.

Under Vice President Doris König, the traffic light court could once again cancel billions that were planned for in the federal budget - and plunge the traffic light into a new crisis.

Lindner: Don't wait for the verdict from Karlsruhe, abolish the solidarity surcharge straight away

Finance Minister Christian Lindner (FDP) is already calling for a reform of the solidarity surcharge to be initiated before an upcoming court decision.

The Federal Constitutional Court will probably deal with the lawsuit brought by his party colleagues against the Soli this year, said the FDP leader on Wednesday (March 13, 2024) at an event organized by the medium-sized business association BVMW.

The traffic light wants to raise twelve billion from the remaining funds in 2024.

Lindner said: “We should not wait for constitutional clarification from Karlsruhe as to whether the solidarity surcharge should be abolished.”

Instead, he would “like to make a political decision that we begin the phase-out with the solidarity surcharge.” However, the hurdles for this in the coalition are high. 

Karlsruhe's billion-dollar verdict plunged the traffic light government into crisis

Lindner further described the abolition of solidarity as “the fastest effective corporate tax reform”.

“Politically and economically, everything speaks for it,” he said.

However, this can only be achieved financially if savings are made elsewhere in the budget.

“Every euro that I forego because of tax relief cannot be used for other tasks, subsidies or social programs at the same time.”

In December 2023, almost exactly two months after the Federal Constitutional Court's budget ruling, the SPD, Greens and FDP agreed on a new budget for 2024.

All of this became necessary because the Constitutional Court had declared the previous practice of special funds unconstitutional.

According to the ruling from Karlsruhe, 60 billion euros are missing from the so-called climate and transformation fund, which had already been planned for the next few years.

A total of 17 billion euros was missing from the budget for 2024.

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The German economy is limping – should the soli be abolished?

Federal Economics Minister Robert Habeck (Greens) and Lindner have been arguing for weeks about the right way to boost the sluggish German economy.

Habeck spoke out in favor of a corporate tax reform and wants to finance this with new debt.

Finance Minister Lindner strictly rejects this and called for the solidarity surcharge, which companies also pay, to be abolished.

The SPD, in turn, is critical of this, as are the Greens: “Politically speaking, disproportionate relief for only the top ten percent would be very questionable,” says Katharina Beck, financial policy spokeswoman for the Green parliamentary group.

The SDP wants to re-justify the levy: The SPD has decided to reclassify the existing supplementary levy for the ten percent highest incomes into a constitutional future levy,” said Michael Schrodi, financial policy spokesman for the SPD parliamentary group.

Source: merkur

All news articles on 2024-03-14

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