August 20, 2019 /
The German government has agreed that the solidarity surcharge will be abolished in August.
The SPD has now decided that it will support the complete abolition of the solidarity surcharge demanded by the CDU/CSU if top earners also have to pay more income tax.
SPD Chairman Thorsten Schäfer-Gümbel justifies this decision by stating that abolishing the solidarity surcharge for all would only “increase the net income of the super-rich and thus widen the gap between rich and poor in Germany even further”.
Soli will be abolished for the majority of taxpayers by 2021
The solidarity surcharge is a surcharge of 5.5% on income tax and has been levied since 1995.
In 2017, the solidarity surcharge brought in almost 18 billion euros for the state. Almost 14 billion euros of this was paid by the 20% of the population with the highest incomes (DIW estimate)
In the coalition agreement, the SPD and the CDU/CSU agreed to abolish the solidarity surcharge for the bottom 90% of taxpayers by 2021. However, Olaf Scholz’s draft bill provides for a further 6.5% of taxpayers to be relieved by abolishing at least part of the solidarity surcharge.
In order to achieve the SPD and CDU/CSU’s goal of completely abolishing the solidarity surcharge in the longer term, a higher income tax for high earners could be introduced “for reasons of fairness”
Source: spiegel.de