Germany announces a 10 billion plan to help families

German families drinking on a terrace in Munich. / Afp

The Inflation Compensation Law raises the minimum exempt from making the income statement and will give greater subsidies per child

The Federal Minister of Finance, the liberal Christian Lindner, announced on Wednesday an initiative to compensate for high inflation and tax relief to the citizens of Germany, mainly through an increase in the basic tax-free amount and greater financial aid per child. If approved in the German lower house, the so-called Inflation Compensation Law will benefit "some 48 million citizens, including pensioners and the self-employed," the head of the German Treasury told the press.

The average tax discharge will rise to about 192 euros per taxpayer, assured the German head of Finance, who wants to benefit the average population of the country with these measures in the face of the effects of inflation. "People are very concerned about inflation," said Lindner, who stressed that now is the time to act in view of the continuing rise in fuel prices, especially natural gas, and food.

The liberal politician pointed out that the tax reduction contemplated in his plans will add up to more than 10,000 million euros and will avoid the so-called "cold progression", as a latent rise in taxes is called in this country when salary increases are devoured by inflation and Despite everything, there is a tax increase. In this sense, Lindner stressed that his intention is to avoid "a tax increase by omission." His plans are, however, conflicting in the tripartite coalition of Social Democrats (SPD), Greens and Liberals (FDP) that governs Germany.

For families with incomes below 62,000 euros

The SPD and environmentalists demand specific tax breaks for the most disadvantaged citizens. Lindner's plans, reluctant until now to tax concessions, will benefit in principle all those individuals or families with gross annual income of less than 62,000 euros. "It is not about unloading, but about giving up new loads," said the minister, referring to "cold progression." From the SPD, the main partner of the government coalition in Berlin, the liberal politician's initiative was criticized for being insufficient. “The proposed increase in the basic tax-free amount and child benefits point in the right direction but they are not enough,” said Achim Post, vice president of the Social Democratic parliamentary group, who also demanded direct payments to low- and middle-income citizens.

Andreas Audretsch, number two of the Greens in the Bundestag, stated for his part that "these tax reliefs, from which people with high incomes benefit three times more than those with low incomes, are not realistic" and from the opposition party The Left described Lindner's proposal as a "joke", since, according to his parliamentary spokesman, Christian Görke, the most disadvantaged 70% of the population would not benefit from the measure at all, since, due to their low income, They don't even pay personal income tax.

'In absolute numbers Lindner's proposal benefits the highest income citizens the most,' Görke said. Also the powerful German Confederation of Trade Unions (DGB) and the Federation of Taxpayers rejected Lindner's initiative for not taxing low-income households, nor taxing the most fortunate.

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