started · updated
Germany approves 2027 income tax reform bill
The German federal cabinet has approved a draft for the 2027 income tax reform, aimed at providing approximately 10 billion euros in annual relief for families and low-to-middle-income households. Key provisions include increasing the basic tax allowance to 12,564 euros in 2027 and 12,900 euros in 2028, as well as raising the threshold for the 42 percent top tax rate to 70,600 euros. To fund these measures, the reform introduces higher tax rates for top earners, with a 45 percent rate applying at 250,000 euros of taxable income and a new 47 percent rate for income exceeding 280,000 euros.
The reform also includes a plan to increase the flat-rate tax on minijobs from 2 percent to 5 percent starting January 1, 2027. Additionally, the monthly earnings limit for minijobs is set to rise to 633 euros due to increases in the minimum wage.
The proposal has faced criticism from the CDU/CSU Union. Politicians such as Fritz Güntzler and Florian Dorn have argued that the relief is insufficient, calling for measures to offset cold progression—estimated by Güntzler at 8 billion euros—and demanding total relief exceeding 15 billion euros. The Union has rejected using higher inheritance taxes to finance the reform, suggesting instead budget cuts.
Entities
Bundesrat · Bundestag · CDA · CDU · CDU/CSU · CSU · Dennis Radtke · German Federal Cabinet · German Federal Ministry of Finance · Germany · Lars Klingbeil · SPD
Claims
What the coverage asserts, and how many sources carry each claim.
- [○ 1 SOURCE] CDU politician Fritz Güntzler estimates the cost of offsetting cold progression at 8 billion euros. www.moin.de
- [○ 1 SOURCE] CDA Federal Chairman Dennis Radtke calls for a permanent mechanism to offset cold progression. www.cda-bund.de
- [○ 1 SOURCE] CSU Finance Politician Florian Dorn demands tax relief exceeding 15 billion euros. www.moin.de
- [● 3 SOURCES] The German federal cabinet approved an income tax reform bill on Wednesday, September 2. www.moin.de · www.leinetal24.de · www.ariva.de
- [○ 1 SOURCE] The CDU/CSU Union rejects higher inheritance taxes as a method for financing the reform. www.moin.de
- [● 3 SOURCES] SPD Finance Minister Lars Klingbeil plans a 10 billion euro relief package for families and small to medium incomes. www.moin.de · www.leinetal24.de · www.ariva.de
- [○ 1 SOURCE] CDA proposes an annual automatic adjustment for cold progression based on the Austrian model. www.cda-bund.de
- [● 4 SOURCES] The top tax rate of 42 percent will apply starting from 70,600 euros instead of 69,879 euros. www.leinetal24.de · www.moneyvox.fr · www.epochtimes.fr · www.ariva.de
- [● 4 SOURCES] The basic tax allowance will increase from 12,348 euros to 12,564 euros in 2027 and 12,900 euros in 2028. www.leinetal24.de · www.moneyvox.fr · www.epochtimes.fr · www.ariva.de
- [○ 1 SOURCE] The flat-rate tax on minijobs is to be increased from two to five percent. www.ad-hoc-news.de
- [● 3 SOURCES] A 45 percent tax rate will apply from 250,000 euros of income, and 47 percent above 280,000 euros. www.leinetal24.de · www.moneyvox.fr · www.epochtimes.fr