Tax ideas of the CDU: The Union moves a bit in the direction of the SPD

Those who sit in the opposition have plenty of time to think fundamentally about why they ended up there, what they should do better in the future, how they can convince the citizens of their merits so that the next election ends better. The Union currently has an unwanted opportunity for renewal.

The new basic program, which the CDU chairman Friedrich Merz is currently preparing, has the dual task of pointing the party in the direction and showing the citizens the direction of the party. An important part of the new is tax policy. A lot depends on this: Who will pay less in the future? Who more? What is available to the state, for investments, for social services, for its very own tasks such as internal and external security?

What the CDU Commission on Prosperity has written down on taxes is remarkable. Three points should be mentioned here: Firstly, they want to increase the top tax rate in order to be able to relieve the burden on the middle class. In return, the residual solos are to be omitted. Secondly, a revolutionary new inheritance tax regime is proposed, with a single rate on everything for all.

Thirdly, it is suggested that companies should be relieved. Retained profits are to be taxed at a lower rate. The trade tax is to be replaced by surcharges on income tax and corporation tax. The municipalities, which have so far been entitled to this revenue, have remained in control of the procedure, or rather of the surcharge rates.

Merz once caused a sensation with the "beer mat"

Even if it is only a working draft so far, it can be assumed that the 13 members of the commission will approve the proposal at the weekend. The result is likely to find its way into the basic program, after all, the CDU chairman Friedrich Merz is supposed to endorse the thrust of the proposals in principle.

That's a nice volte, after all, he had caused a sensation two decades ago with his concept of a simple low tax ("beer mat"). At that time, the CDU was also in opposition. The FDP propagated catchily "simple, low and fair". Merz plagiarized – and became the star of the Leipzig party congress. As is well known, Angela Merkel later became chancellor, Merz nothing. He retired from politics shortly afterwards – and only returned when Merkel was about to leave.

It is not only in terms of personnel policy that things have changed. At that time, the tax falcon Merz campaigned for a step-by-step model with the three rates of 12, 24 and 36 percent. He wanted to burden entrepreneurial income with 24 percent, with trade tax it would come to 39 percent. In order to be able to finance all this, he wanted to eliminate exceptions. This would make tax law easier, he said.

Reach stronger at the top

Twenty years later, Germany has an income tax that rises relatively quickly to 42 percent, and for top earners it is 45 percent at its peak. For high incomes, the solidarity surcharge of 5.5 percent continues to be added to the tax liability. The CDU is now planning to relieve the burden on the middle class – for this it is prepared to reach out more strongly at the top. That's probably popular. But it is doubtful whether the calculation will work out economically. At the top, you can never collect what you need to relieve the middle. At the same time, there is a risk of collateral damage. If only a few super-rich people discover how nice it is to live in Switzerland or Austria, there is a lot missing from the revenue calculation.

Family entrepreneurs are already sounding the alarm. Even more than a higher tax rate in income tax, they are driven by the plans for inheritance tax. 10 percent on everything – including business assets – would hit them hard. So far, family businesses have been able to avoid this tax burden by continuing to operate and proving that jobs have been preserved. In the case of large inheritances and gifts, the beneficiary may not already be rich, but there is also a lot you can do if you design in time.

It is understandable that family entrepreneurs fear a standard rate here. Income tax shows how politics works. Nevertheless, it cannot be right for "normal" families to pay inheritance tax, right is not enough.

Under Merz, the CDU is moving a bit in the direction of the SPD and the Greens. Whether it paves the way for the Union to return to the Chancellery in the next election is one question, whether this strategy would be good for the country is another. Only one thing is certain. It helps the FDP, which suffers in the traffic light: it now rejects any tax increase alone.