Lower Saxony & Bremen: Finance Minister: Concern over planned tax cuts

Lower Saxony & Bremen
Finance Minister: Concern over planned tax cuts

31.08.2024, 12:01

Federal Finance Minister Christian Lindner is planning tax cuts because of bracket creep. According to Lower Saxony's Finance Minister Gerald Heere, however, the last word has not yet been spoken.

Hanover (dpa/lni) – According to its finance minister, Lower Saxony is concerned about planned tax cuts. The plans of the Federal Ministry of Finance have so far only been partially reflected in the state budget for 2025, said Lower Saxony's finance minister Gerald Heere (Greens) to the “Nordwest-Zeitung”. However, the state budget is generally solid, the minister stressed.

In June, plans were announced according to which Federal Finance Minister Christian Lindner (FDP) will reduce the effects of the high inflation compensation and relieve taxpayers of 23 billion euros in the next few years. The plan is to adjust wage and income tax in three steps by 2026. Lindner will use this to compensate for the so-called bracket creep, a creeping tax increase when a salary increase is completely eaten up by inflation but still leads to higher taxation.

From 2026 onwards, Lower Saxony is expected to lose 700 to 800 million euros in tax revenue per year. This could stimulate the economy and bring in new tax revenue. But the gap in the budget that would have to be closed in one fell swoop is substantial, said Heere. “This large sum is difficult to digest.” Expect major discussions between the states and the federal government.