Lindner defends inflation compensation for "working middle"

Christian Lindner

The Federal Minister of Finance defended the Inflation Compensation Act.

(Photo: dpa)

Berlin Federal Finance Minister Christian Lindner Has the planned tax adjustment for inflation defended for people who do not receive special social benefits. In view of the enormous price increases, it is only fair that "the working middle of society" is also considered, said the FDPboss on Thursday to introduce a draft law in the Bundestag. The law is of particular importance because it maintains purchasing power and ensures that actually stable sectors such as trade and services are not additionally infected by the crisis.

The plans launched by the cabinet aim to mitigate the effects of the inflation to cushion income tax. Among other things, the basic allowance is to be increased next year, i.e. the income up to which no tax is paid.

Other key values ​​of the tax tariff are also to be shifted in order to compensate for the effect of the cold progression. This is what you call a kind of creeping tax increase if you continue to raise taxes Steer pays even though purchasing power is falling due to inflation. In the future, the top tax rate will also only apply to higher incomes.

Lindner appealed to the countries to agree to the plans. "It cannot be that the state is benefiting from inflation while families no longer know how to make ends meet with their income."

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What applies to the federal government must also apply to the states. Funding needs are not just for the state. With the law, the federal government also wants to raise child benefit and the child tax allowance.

Support in principle came from the opposition, but there was also criticism. Union parliamentary group leader Mathias Middelberg (CDU) called the state's "return of excess profits" due to inflation a good building block in the relief package. The law will only take effect next year, and the federal government will keep ten billion euros from this year.

More: Which measures will now help against the impending recession

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