Useful Articles Archive: Cold Progression: Taxpayers Association urges government to take action

Sunday, April 27, 2014

Cold Progression: Taxpayers Association urges government to take action

Berlin – The term sounds so abstract technocratic, that the unpleasant consequences of the so-called bracket creep hardly resonate. For many citizens, it opens up the latest on their views on the content label:. The pay rise has little or no noticeable because the state reclaims through higher tax rates a larger share of income for themselves

The mechanism for employees be quite painful, in the worst case remains taking into account inflation less money left than before. According to a calculation of the Taxpayers cold progression means that an employee must pay for a wage increase of three percent up to 7.3 percent more taxes.

According to SPIEGEL information is Federal Finance Wolfgang Schäuble now willing dismantle the bracket creep . “Once in the household arise scope and there is a common will of the coalition partners, the issue to address bracket creep, I’m the last one to the project closes,” the CDU politician said. 2012 had the then black-yellow government tried to adjust the tax rates of inflation and to relieve the citizens, but was hampered by the red-green majority in the Bundesrat. Because bubbling tax revenue pressure for the grand coalition now but has been increasing, to correct the cold progression. Partial counter-financing by reducing subsidies

In the SPD indicated after SPIEGEL information already on the willingness to support the reduction of cold progression only in the event of a total counter-financing, such as a higher top tax rate. The Social Democrats would meet with the absence of a higher peak control of the Union, but would also have to pay a price for a coalition compromise: After SPIEGEL information, it runs in the fight against the cold progression to a partial counter-financing out through the reduction of tax subsidies. Although the EU had made with the slogan campaign to try to raise taxes – a conditional by reducing subsidies greater burden on taxpayers would be for the CDU and the CSU but apparently easier to get over than about a higher income tax

Will the Great. Coalition on the subject have cold progression success, they must convince the provinces. And there it is clear that you do not want it pay: “The common goal must be to relieve the middle class in the cold progression is clear that the failures must be complete and socially balanced funds against and not at the expense of state budgets. . allowed One way to achieve this, tax subsidies should be removed elsewhere, “said Baden-Württemberg Deputy Prime Minister Nils Schmid (SPD)

Also, Lower Saxony Minister of Finance Peter-Jürgen Schneider formulated conditions.” Given the debt brake need those countries to compensate the loss of tax revenue. The solos belongs therefore to the table. Currently, half of the revenue flows only in the new federal states, the rest receive by the federal government. This must then come to an end “, the SPD politician told . SPIEGEL ONLINE

Even Hesse’s Minister of Finance Thomas Shepherd warned against reprisal for the states: “In our view there must be no loss of tax revenue.” The CDU politician added that he would welcome it would be “if by ‘de-demonizing’ of fiscal subsidy cuts in the Union scope for tax policy design options” arise.

“There is only one output problem “

The Taxpayers responded with little understanding that politicians the cold progression – like now also Finance Minister Schäuble – want to break only in the case of financial leeway. “Who is an alleged funding problem in the room, will in reality prevent the cold progression is actually abolished,” President Reiner wood nail told SPIEGEL ONLINE. Schäuble would only change its medium-term financial planning. “It is torn a hole in the current budget, when the cold progression is abolished,” said Wood nail. He referred to the tax revenues of federal and state governments in the past month in the amount of 55 billion euros. “Such a strong cash month there has never been.” From 2017, tax revenues would exceed the mark of 700 billion euros, well, even if the cold progression would be abolished. From a revenue problem, therefore, can be no question. “There is only one output problem,” wooden nail.

said too hastily it seems not the grand coalition with the removal of cold progression, however, to have. A government spokesman had recently declared, that there were in 2014 and 2015 no room , “to address this issue.”

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