Berlin The oral hearing before the Federal Fiscal Court (BFH) in Munich this Tuesday lasted just over an hour: The IX. Senate examined whether the levying of the solidarity surcharge, which will continue to apply from 2020, was unconstitutional. The judges did not indicate a trend.
In the end there was at least a decision that BFH President Hans-Josef Thesling presented: The decision in the solidarity-based procedure (file number IX R 15/20) will be announced on January 30th. Then it is clear whether the lawsuit Federal Constitutional Court will be presented in Karlsruhe.
The BFH negotiated a model lawsuit from the Association of Taxpayers (BdSt). With the help of the association, a couple from Bavaria is suing against the solidarity surcharge. The lawsuit has now been going on for three years. The Nuremberg Finance Court had dismissed the claim in the first instance (file number 3 K 1098/19), but allowed an appeal to the BFH due to the fundamental importance of the matter.
The Soli is a supplementary tax to income tax and corporation tax. It has been collected since 1995 to finance German unity. And this despite the fact that the Solidarity Pact II as development aid for the eastern federal states expired at the end of 2019 and the federal-state financial relationships were reorganized. In 2021, around 90 percent of all taxpayers would no longer have the solos. Above all, top earners and companies still have to pay the surcharge.
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The plaintiffs argue that the surcharge became unconstitutional after Solidarity Pact II expired. Supplementary taxes are “purpose taxes”. If the purpose no longer applies, the associated tax would also have to be omitted, said the representative of the two plaintiffs, tax lawyer Roman Seer.
billion for the federal budget
In addition, the plaintiffs and their lawyers accuse the federal government of violating the principle of equality in the Basic Law, because only a small minority of taxpayers have to pay the tax, but not the vast majority. “It’s really an additional income tax,” said law professor Seer. The President of the Taxpayers’ Association, Reiner Holznagel, criticized: “The solidarity surcharge has now become a tax on the rich through the back door.”
The solidarity surcharge should flush around twelve billion euros into the federal budget in the current year. Like all tax revenues, the soli is not earmarked. The funds were never used exclusively for the construction of the East.
Federal Minister of Finance Christian Lindner (FDP) had decided that his department would not take part in the BFH proceedings – contrary to the position of his predecessor, today’s Chancellor Olaf Scholz (SPD). the FDP has long been demanding the complete abolition of the solis.
Deputy FDP parliamentary group leader Christoph Meyer said: “Hopefully today’s negotiations are the beginning of the end of the solidarity surcharge, even if that ends up being the case Federal Constitutional Court will make a final decision.” At the latest when the Solidarity Pact expires, the constitutional basis for levying the solidarity surcharge will no longer apply.
At the same time, Meyer rejected a reallocation of the solis: If federal income were to be reduced by abolishing the solidarity surcharge, this would not be compensated for “by other tax or levy increases”. The solos should be “fundamentally abolished”. This also “contributes to reducing the burden on citizens and companies in the crisis”.
>> Read also: Soli abolition would relieve above all high earners
Green Group Vice President Andreas Audretsch emphasized that the BFH negotiated the solos “and not the question of a fair tax policy”. “The principle that the absolute top earners have to make a higher contribution is completely independent of the outcome of the process,” said the Greens politician. At a time when many people with little money have to accept hard cuts in everyday life, it is “absurd” to relieve the richest in the country.
The Director of the Institute for Tax Law at the University of Cologne, Johanna Hey, clear about the further process. She emphasized: “Mere doubts are not enough.” If the BFH approves the solos, the plaintiffs can file a constitutional complaint.