German Finance Minister Lars Klingbeil is open to broader tax relief but has demanded concessions from the conservative Union bloc on top income tax rates and inheritance tax. A draft income tax reform bill is due to reach cabinet in early September, proposing ten billion euros in relief from 2028 targeted at low and middle earners, funded in part by raising the top rate and eliminating tax breaks.
The plan notably excludes compensation for bracket creep, drawing sharp rebukes. CDU lawmaker Dennis Radtke called for inflation adjustments, saying anything less would deceive taxpayers, while the Greens' Katharina Beck argued the reform should not be marketed as relief and proposed cutting health insurance contributions instead.
Separately, Klingbeil plans to abolish the tax advantage on employee discounts, a move projected to save 240 million euros annually. CDU politician Fritz Güntzler condemned the cut as a hidden pay reduction, while Green lawmaker Sascha Müller warned the bureaucratic burden could deter companies from offering discounts altogether.