Interview , News of 18 May 2017

"Little room for maneuver with tax relief in the medium term": five questions for Stefan Bach

Stefan Redel (Copyright)  Finanzamt Formular Steuererklärung
Copyright: Stefan Redel

Mr. Bach, there is growing criticism that the middle income segments are suffering from a tax and social contribution burden that is too heavy. Does the middle class pay a disproportionately high amount of income tax?

Actually, the middle class has a relatively low income tax burden. This is because we use the basic personal exemption to shield the subsistence level from taxation, and a range of deductions can be taken before taxes. The income tax burden does not rise sharply until the high income segments. The wealthy members of the population are primarily responsible for Germany’s income tax revenue. The wealthiest ten percent pay around 56 percent of the total. [...]

The full interview with Stefan Bach in DIW Economic Bulletin 20/2017 | PDF, 86.15 KB