While citizens are struggling with inflation and rising gas prices, the traffic lights keep coming up with new proposals for further relief. But who should pay for that? Federal Finance Minister Christian Lindner on priorities, tax increases and the debt brake.
FOCUS online: The FDP brand core was the promise during the general election: no tax increases. Does this commitment stand until the end of the legislative period?
Christian Lindner: Yes. Increasing the tax burden further in a country with the highest tax would jeopardize economic development. On the contrary, it has already been possible to achieve significant relief.
Why does this promise apply to taxes but not to social security contributions?
Christian Lindner: The development of social contributions also worries me. Here we only have an indirect influence. This is because social security is borne by the contributions of employers and employees. The situation on the labor market, demographic trends and cost increases are having an impact. Above all, however, the previous CDU-led government made performance promises that were never sustainably financed. That’s a mortgage we need to work on.
The traffic light is now planning relief in the billions. It said the package was “in the final votes”. Can you give us a time frame?
Christian Lindner: The relief proposals should be available in time for parliamentary deliberations on the 2023 budget. When the 2023 budget is drawn up, we need to know what other projects there are.
Does that mean when the deliberations will start in September or when the budget will be decided in December?
Christian Lindner: We should know the outlines of the relief package by September.
Are further reliefs being discussed in addition to the known projects?
Christian Lindner: There are other building blocks and measures that are under political discussion. For me it is important that in the end we have a concept that comprises three building blocks: help for those in need, protection against inflation for the working middle class and targeted economic aid in those areas in which there is a risk of structural breaks due to increased energy and gas prices. Overall, we should do things differently than with the first and second relief packages that we put together this year.
In what way?
Christian Lindner: There were many individual measures with which we quickly responded to the shock of the Ukraine war. We now know that we are dealing with permanent and structural challenges. We should use other instruments there.
Olaf Scholz announced that there should be a reduction in VAT on gas. Doesn’t the lowering of the price mean that the incentive to save energy is lost?
Christian Lindner: Gas prices are so high that many people are very worried. There is no lack of incentive to save energy. In view of the prices for heating energy, nobody regulates the room temperature with the window.
Has the traffic light ensured that the discount is passed on when the allocation is made?
Christian Lindner: The Federal Chancellor and Robert Habeck have appealed to companies to do this. I share this appeal. In fact, I’m reluctant to cut consumption taxes. When it came to the tank discount, I originally had other ideas. But now there was no better option. After all, it would be politically wrong to levy VAT on a social compensation measure such as the gas levy.
The financially strongest ten percent of the country use twice as much gas as the poorest ten percent. Doesn’t that mean that someone who only has to heat their one-room apartment suddenly has to finance the homeowner’s conservatory?
Christian Lindner: No, because we all pay a price per kilowatt hour. If you consume more, you pay more accordingly.
One of your central proposals is the income tax cut. Greens and SPD criticize that your income tax reduction is an enormously expensive project, which is particularly beneficial for high earners.
Christian Lindner: No, I’m not proposing a tax cut. I want to prevent secret tax increases. The higher your income, the higher the percentage you have to pay in taxes. Thats alright. But if productivity doesn’t increase at all, but you still have to pay higher taxes because of inflation, then that’s unfair. I want to prevent this secret tax increase through cold progression.
Doesn’t someone with little or no income need a few hundred euros more urgently than someone with an annual salary of 60,000 euros or more?
Christian Lindner: The necessary support for the needy is one thing, fairness towards mainstream society is another. You shouldn’t play them off against each other. If you earn 40,000, 50,000 or 60,000 euros, pay a lot in taxes and pay your gas bill yourself, I would like to save you at least a tax increase.
After all, we are talking about a measure that will cost the federal government around ten billion euros. In times of necessary prioritization, the question again: does someone like you need the money?
Christian Lindner: It’s not about me. Therefore, the effect is also capped at an income of around 62,000 euros. The ten billion euros would be income from a tax increase that comes about simply through political omission. In the last ten years, the tax system has always been adjusted to inflation. Now, of all times, when inflation is particularly high, is that being questioned? I think that’s wrong.
You spoke now only of the working middle of society. What about the low-income?
Christian Lindner: Just a moment, people with lower incomes are also part of the working middle class. Here we want to expand the circle of those entitled to housing benefit. In addition, heating costs should be included. Also under discussion is that one-off payments from employers should be tax-free for people. That already existed with the Corona bonus.
Doesn’t it make a difference whether I passively receive more money through income tax or whether I have to apply for housing benefit from the office? Don’t you turn countless Germans into social cases with this policy?
Christian Lindner: Nobody needs to be ashamed to claim the solidarity of our society.
Will the debt brake be adhered to in any case despite the planned relief?
Christian Lindner: I am convinced that, for constitutional reasons, we have no leeway in making decisions. In view of the higher interest rates for the state and inflation, there are also good economic reasons to stop taking on more and more debt. The draft budget that we approved before the summer break already contains provisions so that we can implement all the necessary measures.
