Skip to main content

RWI Positionen #60

2014

Philipp Breidenbach, Roland Döhrn, Tanja Kasten

Günstige Gelegenheit: Jetzt die kalte Progression abschaffen

Verzicht auf heimliche Steuererhöhungen würde den Staat nur 3,8 Milliarden Euro pro Jahr kosten

In the past few months, the reduction of the income tax burden that results from bracket creep in Germany's progressive income tax system has come back into focus of federal fiscal policy. However, it should not be the objective to solve the problem of bracket creep only temporarily by a discretionary adjustment of the tax schedule. In order to permanently remedy the problem, the income tax schedule has to be steadily adjusted for inflation in a rule based manner. The following RWI Position policy paper describes the impact of such a "tax schedule on wheels" for the years 2015 and 2016 - from both the aggregated perspective of public finances and with respect to distributive aspects. Calculations show that tax revenues would, on average, fall by almost 3.8 billion Euros per year. In absolute terms, high-income earners would be more relieved than low-income earners, although relative reliefs would be highest for low-income earners. In this respect, the proposed reduction in fiscal drag would also contribute to the aim, which is backed by a broad political consensus, to relief the tax burden for lower- and middleincome earners.