Rising inflation affects almost everyone, but not everyone can withstand the increased costs. Therefore, every second German should now be financially relieved by the Inflation Compensation Act.
The increased costs are noticeable everywhere, regardless of whether it is with the groceries in the supermarket or through increased energy prices for heating. The finance minister wants to take countermeasures with an inflation compensation law and relieve 48 million Germans.
In addition, families in particular are to receive targeted tax support. Around 10 billion euros are to be spent on this. Here is an overview of how much you can save.
What’s really nasty is that if you’re one of the lucky ones getting a few percent more pay, it doesn’t help much when inflation eats it all away. Now you could say that’s better than no raise, but that’s not always true. Because if you slip into a higher tax class due to the higher earnings, the state will ask you to pay in addition.
Lindner wants to act against this cold progression effect with his plans. The 48 million Germans mentioned are the taxable citizens who are to be relieved. These include employees, pensioners, the self-employed and entrepreneurs. However, particularly high incomes are deliberately excluded from this, for which the wealthy tax rate of 45 percent applies.
Speaking of tax returns: According to the plans, around 270,000 people should soon no longer have to submit a tax return.
The cornerstones of inflation compensation are as follows:
According to the Federal Ministry of Finance, employees should have an average of 193 euros more net next year than this year if their income does not change. The tax rates will also be adjusted accordingly. At the top, citizens are relieved of up to 479 euros per year. Details can be found in the table:
