Germany to Raise Top Income Tax Rate to Generate €14 Billion in Additional Revenue
Berlin – The German government is planning to increase the top income tax rate from 42% to 45%, a move estimated to generate an additional €14 billion in tax revenue per year.
The increase, which is part of the government’s plans to finance the country’s social welfare system, is expected to take effect in January 2024.
The top income tax rate applies to individuals earning more than €277,826 per year. The proposed increase will raise the top marginal tax rate to 45%, increasing the tax burden on high earners.
The government’s decision to raise the top income tax rate has drawn mixed reactions. Supporters of the move argue that it is necessary to ensure a more equitable distribution of tax revenue and to generate additional funds for social programs.
Critics, however, argue that the tax increase will discourage investment and economic growth. They also maintain that it is unfair to single out high earners for additional taxation.
The proposed tax increase is expected to face challenges in the Bundestag, the German parliament. The opposition parties are expected to oppose the move, arguing that it will harm the economy and disproportionately affect high-income individuals.
The government will need to secure the support of at least one opposition party in order to pass the tax increase. The outcome of the parliamentary debate is unclear at this stage.
If the tax increase is approved, it will be the first time that the top income tax rate has been increased in Germany since 1998.
14 Milliarden Euro mehr durch höheren Spitzensteuersatz
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