Agency Report –
Berlin – Financial reforms touted by the frontrunners in Germany’s upcoming parliamentary election will primarily benefit higher-income earners, according to the new study published on Saturday.
According to the Leibniz Institute for European Economic Research (ZEW), higher-income earners stand to gain the most from the plans of the conservative CDU/CSU alliance, the far-right Alternative for Germany (AfD), as well as the pro-business Free Democratic Party (FDP).
By contrast, the Social Democrats (SDP) of Chancellor Olaf Scholz, the Greens, the Left Party and the left-wing Sahra Wagenknecht Alliance (BSW) offer relief for lower and middle income earners in particular.
In a joint project with Germany’s Süddeutsche Zeitung newspaper, the ZEW analysed the effects of the parties’ key reform proposals on taxes, minimum wages and social benefits on private households.
It calculated that a single-earner couple with two children and a low income would be financially better off in the event of a victory by the SPD, Greens, Left Party, BSW or CDU/CSU in the parliamentary polls on 23 February.
With a gross income of €40,000 ($41,000) per year, this type of family would have €6,150 more at their disposal with the Left Party, €1,010 with the BSW, €870 with the Greens, €860 with the SPD and €300 with the CDU/CSU.
According to the researchers, the AfD and FDP programmes would only yield “significant improvements” for incomes of €60,000 and above.
High-income households would benefit more from the planned tax reforms in the CDU/CSU, FDP and AfD programmes.
A single-earner couple with two children with an exemplary gross annual income of €180,000 would therefore receive a financial gain of around €19,190 under the AfD, €11,990 under the FDP and €5,840 under the CDU/CSU.
The researchers did not consider the financial impact of certain coalitions. Potential economic consequences, such as job losses due to a minimum wage increase, were also excluded.
