On Thursday, Finance Minister Christian Lindner (FDP) will announce from faraway Japan what the federal, state and local governments can expect in terms of tax revenues up to 2028. Most recently, 993 billion euros were forecast for next year, of which 390 billion euros will be accounted for by the federal government. Now that the German government is assessing the prospects for the German economy somewhat brighter, the trillion mark could be taken as early as next year. This was last predicted for 2025. Because the Federal Minister of Finance will be in Niigata at the end of the week for a meeting with his counterparts from the group of seven most important industrialized countries, Lindner will only be seen virtually at home – at the usual time in the afternoon (in Japan it will be 22 p.m.).
Manfred Schäfers
Business correspondent in Berlin.
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High inflation helps the tax authorities, as the tax burden is usually linked to nominal figures. Since the traffic light adjusted the income tax rate to the devaluation of money in autumn and this could not yet be taken into account in the estimate at the end of October (the legislation had not yet been completed at that time), the additional result is likely to be kept within narrow limits in the end. In the foreseeable future, it will not be enough to close the gap in the federal budget, which the Federal Ministry of Finance recently put at 18 billion euros – without the additional demands of the other ministries.
Most recently, talks on the 2024 budget were suspended. Can the tax estimate end this self-blockade of the coalition? Simple question, astonishing answer: The Federal Ministry of Finance does not assume that the responsible working group will forecast such high additional revenues that all the problems of the traffic light will be resolved in favor. On the contrary, at best a small plus is considered possible. And yet it could be the moment that leads to a resumption of talks at ministerial level.
The usual tax increase has long been planned
Once the budget framework is fixed, the necessary decisions can no longer be postponed. Finally, the cabinet wants to adopt the draft budget for next year on June 21. Unlike in the previous decade, there are no benchmarks for this. There is not much time left, work even more. The federal budget consisted of one thousand five hundred pages with many more titles, as the budget politicians call the individual expenditure items.
So far, the coalition has avoided concrete austerity decisions. Most recently, gigantic loans helped across all gaps. Before that, additional tax revenues always came at the right time. Now savings must be made in order to be able to comply with the debt rule, which Lindner insists on. The traffic light coalition has also set itself the goal of "reducing superfluous, ineffective and environmentally and climate-damaging subsidies and expenditures". But not much has happened yet. The Taxpayers' Association reminds in a "savings book" how much increased interest rates and foreseeable repayment obligations hit the account. The usual tax increase has long been planned. Therefore, the interest group calls for spending cuts.